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BUREAU OF RAILWAY ECONOMICS 


H 


Special Studies 

1910-1911 


being its 

Bulletins Nos. 4,11,15, 17, 18, 
21, 23, and 24 


WASHINGTON 

1911 






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5 


THE) BUREAU OF RAILWAY ECONOMICS 

Was established August 1, 1910, by railways of the United States for the 
scientific study of transportation problems 


W. C. Brown, President New York Central Tines 
W. W. Finery, President Southern Railway 

Darius Mirrrr, President Chicago, Burlington & Quincy Railroad 
E. P. Riprry, President Atchison, Topeka & Santa Fe Railway 
Danirr Wirrard, President Baltimore & Ohio Railroad 
B. T. Winchrrr, President St. Touis & San Francisco Railroad 

General Executive Committee 

IyOGAN G. McPHRRSON 

Director 

Frank Haigh Dixon 

Chief Statistician 


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Mir 22 


ft 

1212 


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CONTENTS. 


4. A Comparative Statement of Physical Valuation and Capitalization. 

11. Comment on the Decision in the Western Advanced Rate Case, 
No. 3500. 

15. The Conflict Between Federal and State Regulation of the Rail¬ 
ways. 

17. Railway Wage Increases for the Year Ending June 30, 1911. 
Retrenchment in the Railway Labor Force in 1911. 

18. Capitalization and Dividends of the Railways of Texas, Year 

Ending June 30, 1909. 

21. The Cost of Transportation on the Erie Canal and by Rail. 

23. Analysis of the Accident Statistics of the Interstate Commerce 

Commission for the Year Ending June 30, 1911. 

24. Comparative Railway Statistics of the United States, the United 

Kingdom, France, and Germany. 



A COMPARATIVE STATEMENT 


OF 


PHYSICAL VALUATION AND CAPITALIZATION 


PREPARED BY THE 

BUREAU OF RAILWAY ECONOMICS 


logan g. McPherson 

DIRECTOR 


FRANK HAIGH DIXON 

CHIEF STATISTICIAN 


Q r Jr «' ! ~f "« 


WASHINGTON, D. C. 
1911 







ft of n 

111 










PHYSICAL VALUATION AND CAPITALIZATION. 


INTRODUCTION. 

An attempt has been made in this study to compare as accurately 
as possible the physical value and the capitalization of steam rail¬ 
ways in the states in which official valuations have been made, that 
is, in the states of Washington, South Dakota, Michigan, Minnesota 
and Wisconsin. The state of Texas is considered only casually for 
reasons which appear in the discussion. It should be noted that 
in every case the statistics pertaining to value cover only physical 
properties. No attempt has been made to secure intangible value, 
which, as a matter of fact, has been arrived at only in one or two 
instances by State Commissions. The omission of intangible value 
should be held in mind in comparing physical value and capitaliza¬ 
tion, for it is at least an open question whether intangible value may 
not properly be capitalized. 

The most significant question involved in the method of physical 
valuation is the manner in which right-of-way and terminal value 
is obtained; in other words, whether or not the railway is to be 
allowed a value for its land greater than that of adjoining land, 
because the railway corporation must settle all damages created by 
its entry upon private property, and because it frequently must pay 
an enhanced price for the land which it purchases due to the knowl¬ 
edge on the part of the landowner that the railway must have it at 
any price. The methods of valuing such land, so far as they could 
be discovered, are given in the text. It will be observed that Wash¬ 
ington, South Dakota, Michigan and Wisconsin make allowance for 
this added cost in estimating cost of reproduction, and that the 
Minnesota Railroad Commission while disapproving the method in 
principle, has nevertheless had a valuation prepared upon this basis. 
In this connection, it should be noted that the valuations of both 
Michigan and Wisconsin were made for taxation purposes. 

Assignment of capitalization to the different states has been made 
upon the single track mileage, that is, upon the road mileage basis. 
While this is not the most scientific basis, it is the only practicable 
one which could be employed, for statistics are in most cases not 
available for an assignment upon any other plan. With a few 
notable exceptions, the commissions of the different states present 
only incomplete and undigested statistical matter in their annual 
reports. 

It is necessary to call attention at this point to a matter of tech¬ 
nical detail which becomes, in its application, of very considerable 


4 


importance. Some of those who have already published comparative 
statements of value and capitalization have made assignments of 
capitalization to states upon an erroneous basis. It has apparently 
been the practice to find the ratio of the aggregate mileage within 
the state to the total mileage of all the systems traversing the state, 
and then apply this percentage to their total capitalization to 
determine the state’s proportion of capitalization. This method is 
simple, but it leads to erroneous results, because it applies to a 
series of different capitalizations an average percentage, which, as 
a matter of fact, is applicable to no one of them. The only correct 
method is to determine the capitalization of each road separately 
on the mileage pro-rate basis, and then add the results together to 
obtain the aggregate of state capitalization. This latter method has 
been followed in this presentation. 

So many errors have been discovered in the statistical tables 
prepared by the State Commissions that these reports have not been 
lelied upon in most cases for total mileage or total capitalization. 
The Statistics of Railways of the Interstate Commerce Commission 
has been generally used. 

In attempting this comparison of physical value and capitaliza¬ 
tion, many difficulties have arisen which could not be entirely 
removed. 

1. In the first place, when the valuation has been made by a body 
other than the railroad commission, it has been difficult to identify 
in every case the corporation whose property was valued, and to 
assign to such corporation its proper capitalization. Roads report¬ 
ing their capitalization to the Commission are as a rule the operating- 
roads, while the roads are valued under their corporate names 
whether operating or not. Adjustments have in some cases been 
necessary, but these adjustments have in no case affected the 
conclusions drawn. 

2. As a result of the intercorporate relationships of the various 
railways, the aggregate capitalization, even within the limits of a 
single state, contains more or less duplication. This duplication it 
has been the purpose of this study to eliminate as far as possible, 
i’he most striking case which has been encountered is in Minnesota, 
where not only is the capitalization of the Chicago, Burlington & 
Qiuncy included, but at the same time there is embodied the Great 
Northern’s share of the |215,000,000 bond issue with which the 
C. B. & Q. stock was purchased. Moreover, in eliminating such 
duplications, this study has followed the practice of the Statistician 
of the Interstate Commerce Commission, who eliminates collateral 
trust bonds before computing funded debt per mile for the individual 


5 


railway corporations. All collateral trust bonds have been elimi¬ 
nated from the aggregate capitalization of the individual road before 
its stock and bonds have been assigned to the various states. In the 
same manner, bonds of proprietary companies have been deducted 
when these proprietary companies appear separately with their- 
own capitalization. A third form of duplication has been corrected 
by deducting securities held in the treasury. It is evident that 
securities for which no value has yet been received cannot properly 
be included in a study which compares capitalization and physical 
value. Again, securities held in sinking funds have been eliminated 
from total capitalization. Appropriations to the sinking fund are 
merely appropriations for the retirement of debt, and the statement 
that securities are “kept alive” in a sinking fund is largely a fiction. 
Finally the total capitalization is increased beyond its proper size 
for comparison with physical value by the fact that it is frequently 
issued to cover “other properties” than railways. Railways are 
frequently engaged in business other than transportation and no 
distinction is made between securities issued for transportation and 
those issued for miscellaneous purposes. So far as it has been 
possible, capital issues covering “other properties” have been elimi¬ 
nated, but to do this adequately would have required a more 
extended investigation than was possible at this time. Hence, it is 
probable that a. considerable amount of capitalization is included 
in the comparative tables which might properly be eliminated 
because it does not represent railway property. Even with all these 
deductions there are doubtless other duplications which might be 
eliminated were a careful study made of the purpose for which 
capital stock was issued by the various roads, yet it must be clear 
from the eliminations which have been made that the object is to 
set up against physical value the securities outstanding in the hands 
of the public upon which corporations are entitled to earn. 

3. It is evident that an allocation of capitalization upon a mileage 
pro-rate basis is not an accurate figure for a comparative study of 
this character. It does more than justice to some states and less 
than justice to others. A state like South Dakota with most of its 
mileage single track and with no valuable terminals gets on a 
mileage pro-rate far more than its proportion of the capitalization 
of the roads which operate within its borders, for there is credited 
to the state a portion of the capitalization which belongs to valuable 
properties located elsewhere. On the other hand it is possible that 
the capitalization of the Washington railways should be increased 
beyond the amount allotted on a mileage pro-rate if correct results 
are to be obtained. An illustration of the inaccuracy of this method 


6 


is found in YY isconsin where the Illinois Central with nothing but 
branch line mileage in the state and no valuable terminals has its 
capitalization assigned to the state on a road mile basis. This 
difficulty is inherent in the situation. It only serves to make clear 
the proposition that if railways are to be valued at all they should 
be valued as units and not piecemeal by the separate states. 

From what has just been said it must be clear that such a com¬ 
parison as is presented in this study cannot be conclusive. It has 
been made in the hope that some degree of accuracy might be reached 
in a subject which has received of late much inaccurate treatment. 

WASHINGTON. 

The source of information for the valuation of Washington rail¬ 
ways is the ‘‘Findings of Fact” of the Railroad Commission of 
YV ashington published in 1909. The results of these findings were 
embodied by Mr. J. C. Lawrence of the Washington Commission, in 
an article in the Railway Age Gazette of February 18, 1910, from 
which the facts here given were derived. Commissioner Lawrence 
in this article discusses the methods employed in the valuation of 
Washington railways, and it wall be of interest to quote from his 
discussion before presenting the statistical results : 

The cost of reproducing right-of-way and terminals was estimated on the 
basis of market value of adjacent property, plus the additional amount 
experience has shown a railway company must pay for consequential damages 
in securing such property. * * * 

The unearned increment was allowed in the cost of reproduction. This 
may be either in the cost of construction of roadbed, structures and equipment 
or in the right-of-way and terminals. To fail to allow such increased value 
would be as unfair to the public as to the railways. Take for instance the 
terminals of an established road in an important city which were acquired 
at a low value, say for a million dollars; a new line is constructed and, to 
acquire its terminals contiguous to and of equal value to that of the estab¬ 
lished road, pays, say $ 10 , 000 , 000 . If the latter road were not allowed the 
value it paid then it would be deprived of a return on the amount actually 
and necessarily invested in acquiring its property, and in that way deprived 
of the property itself, for the value of the use of the property is in reality the 
property itself. If this value were allowed to the latter road and denied to 
the former, then traffic tributary to the one would have an advantage over 
the other, and the construction of additional and competing roads would be 
discouraged. * * * 

The Commission concluded that on an established road, maintained to a 
proper standard of efficiency, there would be no continuing depreciation; that 
on a newly constructed line there would be a rapid depreciation of certain 
elements during the first few years. This would apply particularly to ties, 
and, in a lesser degree, to wooden structures and equipment. On the other 
hand, there would be an appreciation of roadbed on a new line due to the 
seasoning and hardening which follows its use, attributable not only to set- 


7 


tling of embankments, thus rendering the condition of the roadbed more 
permanent and safe, but to the necessary labor involved in raising and 
widening embankments, cleaning out and widening cuts, safeguarding them 
from slides and remedying the defects occurring in construction and the 
contingencies which necessarily follow. Such appreciated value of roadbed 
would largely affect the depreciation in the value of the other items. 

The appreciated value of the roadbed was added to the estimated cost of 
reproduction new, and from this sum deductions were made to cover the 
depreciation of all other items. * * * But the depreciated value of a 

road in profitable operation does not equal its market value. To this depre¬ 
ciated value must be added a sufficient amount to cover the enhanced value 
due to building up a successful transportation business. It is inconceivable 
that the value of such a business enterprise under efficient management 
should depreciate from a market standpoint. 

In his discussion of “market value” Mr. Lawrence considers such 
influences as prices of outstanding securities, density of population, 
amount, permanency and class of traffic, and value of facilities for 
doing business. 

In view of the fact that the Washington Commission has not 
made any statistical summary of its findings, it has been somewhat 
difficult to determine whether the entire mileage of tbe state was 
valued and what was the length of mileage actually included. In a 
personal letter under date of December 18, 1910, Commissioner 
Lawrence writes that the valuation included in their “Findings of 
Fact” of 1909, covers “the railway mileage in existence at the time 
of the creation of the Commission, June, 1905, approximating 3,300 
miles. Since that date the mileage has been increased to a little in 
excess of 5,000 miles and the Commission is now engaged in valuing 
this new construction.” 

Yet from the tabular summary presented in the article referred 
to, the Commissioner seems to account for only 3,016 miles, and this 
figure has been used in presenting the per mile of line valuations in 
the table below. In view of the fact that the valuation included 
only the mileage in existence in 1905, it has been necessary to use 
the 1905 capitalization as a comparative figure. It has not been 
found possible to present statistics of capitalization for the exact 
mileage involved in the physical valuation, but the figure employed, 
3,167 miles, is so nearly identical that the worth of the comparison 
is not destroyed. 

Washington—Physical Valuation and Capitalization. 


Physical value (1905-08): 

Total. 

Mileage. 

Per mile. 

Cost of reproduction new. 

.$194,057,240 

3,016 

$64,343 

Present value. 

. 175,797,025 

3,016 

58,288 

Market value. 

. 195,662,635 

3,016 

64,875 

Capitalization . 

. 168,696,670 

3,167 

53,267 






8 


SOUTH DAKOTA. 

At the time that this study was made, the report on physical 
valuation for the state of South Dakota had been completed but had 
not yet been published. Such information as is here given was 
obtained by correspondence. 

In valuing railway lands the Commission used the multiple of 
250 per cent as an average, and applied it to all farm and city lands 
traversed by the roads; that is, it estimated railway land to be worth 
two and one half times that of adjoining land. 

The number of miles valued was 3,953. Although the Commission 
dated its valuation June 30, 1909, it appears that the valuation was 
begun under an act of 1907, and that much of it had been completed 
before January 1, 1909. A more accurate comparison of actual 
conditions would probably have been made had capitalization figures 
been used for 1908 instead of 1909. However, the 1908 figures have 
been employed in the case of but one road, the Chicago, Milwaukee 
& St. Paul of South Dakota, and this was because its intercorporate 
relationships with the parent company were not fully adjusted on 
June 30, 1909. 

South Dakota—Physical Valuation and Capitalization. 

Physical value 1908: Total. Mileage. Per mile. 

Cost of reproduction new.$160,494,503 3,954 $26 933 

Present value. 91,695,132 3,954 23,190 

Capitalization. 138,850,297 3,954 35,116 

MICHIGAN. 

The original appraisal of the physical properties of Michigan rail¬ 
ways was conducted in 1900-01, under the direction of the Board of 
State Tax Commissioners. Since that time the Tax Board has 
annually presented a table of assessed value of railway property, 
which by law must be an assessment at what the Board considers the 
actual value of the property, that is, a 100 per cent assessment. The 
assessed value is doubtless intended to correspond with “present 
value” as determined by the original valuation. Yet the Tax Board 
in its annual presentation of assessed value omits figures of cost 
of reproduction new, gives no table of mileage valued but merely the 
name of each corporation, and gives no indication that a genuine 
investigation of railway values has been made. This leads to the 
inference that no valuation of railway property has been attempted 
m the state of Michigan since the original valuation by Professors 
Cooley and Adams. It has seemed best, therefore, to include a 
comparative statement of valuation and capitalization for the year 





9 


1900, as well as the incomplete statement for 1907. In cases where 
capitalization could not be found for corporations listed in the 
report of the Tax Commissioners, the assessed value of such corpora¬ 
tions has been deducted from the total in order that the statement 
presented might be properly comparative. 

The method of valuing right of way and terminal lands is 
described as follows by Professor Cooley in his report to the Michi¬ 
gan Board of State Tax Commissioners: 

The question whether the increased cost of right of way over and above 
the value as determined by contiguous property may properly be included in 
the present value of a railroad, is a matter about which there may be a 
difference of opinion. The true cash value of a thing has been defined as 
the price upon which a purchaser and a seller mutually agree, and at which 
an actual transfer takes place. If an attempt were made to purchase an 
existing right of way, as, for example, an entrance into a city, if the owner 
were willing to sell at all he surely would take into consideration what it 
would cost the purchaser to get into the city by any other route, and the 
prospective purchaser would surely consider what it would cost him by 
another route. The conclusion finally reached was to add to the value of the 
right of way, as determined by contiguous property, an amount fairly repre¬ 
senting the additional actual cost to the railroad. 


Michigan—Physical Valuation and Capitalization. 


Physical value 1900: 

Total. 

Mileage. 

Per mile. 

Cost of reproduction new. 

.$202,716,262 

7,813 

$25,946 

Present value. 


7,813 

21,298 

Capitalization . 

Physical value 1907: 


7,813 

37,323 

Present value. 

. 204,033,500 

8,343 

24,456 

Capitalization . 


8,343 

42,857 


MINNESOTA. 

The State of Minnesota has recently completed a most exhaustive 
physical valuation of railways as of June 30, 1907. This report 
requires little comment as the very complete statistical presentation 
explains itself. As already noted, the valuation was made on* two 
different bases, described below as Estimate A and Estimate B. In 
Estimate A, allowance is made for the price which railways would 
have to pay for the land for railway purposes, including damages 
and monopoly prices for land. In Estimate B, land is valued on 
the same basis as land lying in contiguous territory. The Minnesota 
Commission contended for the valuation represented by Estimate B, 
the railways maintained that Estimate A was the fairer one. In 
this connection, reference should be made to the basis employed by 
the states of Washington, South Dakota, Wisconsin and Michigan. 

The capitalization figures are those for June 30, 1907. The 







10 


considerable reduction in the capitalization figure below that com¬ 
monly quoted for Minnesota is due to the elimination from the 
Great Northern’s capitalization of $107,000,000, being its proportion 
of the Chicago, Burlington & Quincy collateral 4’s issued jointly by 
the Great Northern and Northern Pacific. In view of the fact that 
the Chicago, Burlington & Quincy capitalization is already included 
in the total capitalization of Minnesota railways, it is an obvious 
duplication to include in the capitalization of the purchasing com¬ 
pany any part of the bonds with which the Burlington stock was 
purchased. 

* Minnesota—Physical Valuation and Capitalization. 


Physical value, 1907, Estimate A: 


Cost of production new— 

Total. 

Mileage. 

Per mile. 

Carrying roads. 


7,577.71 

$52,430 

Switching roads. 


18.72 

770,933 

Total . 


7,596.43 

54,201 

Present value: 




Carrying roads. 


7,577.71 

45,799 

Switching roads. 


18.72 

717,160 

Total . 


7,596.43 

47,454 

Physical value, Estimate Bl: 




Cost of reproduction new... 


7,596.43 

49,210 

Present value. 


7,596.43 

42,463 

Physical value, Estimate B2: 




Cost of reproduction new— 




Carrying roads. 


7,577.71 

46,202 

Switching roads. 


18.72 

579,718 

Total . 


7,596.43 

47,517 

Present value: 




Carrying roads. 


7,577.71 

39,571 

Switching roads.. 


18.72 

525.945 

Total . 


7,596.43 

40,770 

Capitalization: 




Carrying roads. 


7,577.71 

38,574 

Switching roads. 


18.72 

412,732 

Total . 


7,596.43 

$39,496 


♦Estimate A includes multiples on lands for right of way, yards and term¬ 
inals, and allowance for adaptation and solidification of roadbed. Estimate 
B1 omits from Estimate A multiples on lands for right of way, yards and 
terminals. Estimate B2 omits from Estimate A multiples on lands for right 
of way, yards and terminals, and allowance for adaptation and solidification 
of roadbed. 




































11 


WISCONSIN. 


The appraisal of the physical properties of Wisconsin railways is 
in charge of the Wisconsin Tax Commission, and is made primarily 
for taxation purposes. The original appraisal was made as of June 
30, 1903, and annual revisions thereof have been made through the 
medium of reports by the railways to the Engineer of the Commis¬ 
sion. The last report just received is dated June 30, 1909. 

Concerning the method of valuing right of way and terminals, 
Professor W. D. Taylor, then Engineer of the Commission, made the 
following statement in a report to the Commission dated January 2, 
1905: 

To determine the value of the land in the present right of way, such lands 
must be deemed as belonging to the owners of the adjoining lands and to 
be acquired by negotiations with such owners or under the power of eminent 
domain, whereby the owners are entitled to just compensation for the land 
actually taken and for depreciation in the market value of the residue in 
consequence of the railroad crossing the part taken. In ordinary language, 
the inquiry will be first, what is the fair average market price per acre for 
ordinary purposes of the land taken, and second, how much is the depreciation 
in the salable value of the residue of the parcel, lot, or tract with the buildings 
thereon from which the right of way is severed. The sum of the two items, 
first, the market price of the land taken, and the second item, depreciation in 
the salable market value of the residue, will constitute the right-of-way value. 


The figures of total capitalization are those reported by the rail¬ 
ways to the Wisconsin Railroad Commission on June 30, 1909. The 
Tax Commission has valued a number of private unincorporated 
roads, which have no capitalization. The valuations of these roads 
have been omitted from the table presented herewith in order to 
make the comparison more accurate. The mileage figure used in 
computing capitalization per mile could not be made to agree exactly 
with the mileage valued but the discrepancy of 39 miles is not 
sufficient to disturb the general conclusions. 


Wisconsin—Physical Valuation and Capitalization. 


Physical value 1909: Total. 

Cost of reproduction new.$296,803,322 

Present value. 240,718,711 

Capitalization . 311,819,128 


Mileage. Per mile, 
7,098.70 $41,811 

7,098.70 33,910 

7,060.00 44,167 


TEXAS. 

The Texas Railroad Commission estimates the total value of 
railroads in that state up to October 31, 1909, at $212,794,586 or 
$17,198 per mile of line. The aggregate capitalization on June 30, 





12 


1909, including equipment trust obligations and current liabilities, 
is given as $420,031,677, or $31,910 per mile of line. These two 
totals have often been compared and conclusions have been drawn 
from them unfavorable to the methods of railway capitalization. 
Yet a moment’s consideration will show that the two totals have no 
relation to each other whatever. By the Stock and Bond Law of 
April 8, 1893, the Railroad Commission was instructed to value the 
property of the various railroads as a preliminary to the approval 
or disapproval of the issue of additional securities. Valuations were 
made immediately of all roads then in existence and changes in the 
aggregate value of Texas railroads since that time have occurred 
only when new lines have been constructed. In other words, the 
valuation now so frequently quoted was made in 1894-6, when, 
following the panic of 1893, land, right-of-way, terminal facilities 
and construction materials were at their lowest prices. To present 
that original value as the present value of Texas roads, as the Com¬ 
mission has done, is to refuse to give the roads any credit for 
permanent improvements, for the general settling and seasoning of 
their properties, or for the advance in value due to the general 
growth of the community to which the railroad has largely con¬ 
tributed. 

Whatever may have been the degree of overcapitalization in 1894, 
no comparison of an 1894 valuation with a 1909 capitalization can 
have the slightest validity. From 1896 to 1909 there was an increase 
in the Commission’s valuation of Texas roads per mile of line of 
only 9.3 per cent. That this increase does not at all represent the 
actual increase in investment in Texas roads is shown by a study of 
gross earnings. Taking an average of the three years 1894-6 as a 
base, and comparing this with an average for the three years 1907-9 
there is found to be an increase in gross earnings per mile of road in 
Texas of 71.8 per cent. At the same time, capitalization (stocks and 
bonds) per mile actually decreased 22.24 per cent between 1896 and 
1909. 

Mr. Charles S. Potts, Professor of Law in the University of Texas, 
in his monograph on Railroad Transportation in Texas, expresses 
the opinion that if a thorough revaluation were made of Texas roads 
the margin between actual value and capitalized value would be 
wiped out in the case of many roads. He quotes Mr. R. A. Thompson, 
for many years chief engineer of the Texas Railroad Commission, in 
a hearing before the Interstate Commerce Commission, as asserting 
it to be his deliberate opinion that the physical property of Texas 
railroads, valued by the Commission at $17,000, was worth on an 
average $30,000 per mile of line. 


13 


It is of interest to observe that the Texas Railroad Commission 
in its more recent valuations has placed a higher value per mile 
upon railway property than in its earlier valuations. Between 1894 
and 1896, forty-five roads with a mileage of 9,105 miles were valued 
at an average of $15,589 per mile. Between 1905 and 1909, thirty- 
seven roads, with a mileage of 1,678 miles, were valued at $22,227 
per mile. 

It is significant that the Texas Tax Board in 1908 estimated 
the total value of railroad property, tangible and intangible, as 
$409,957,928 or $31,776 per mile of line. This board in its estimate 
includes all those elements of value which are omitted by the Rail¬ 
road Commission. 

For the reasons given, all figures for Texas are excluded as worth¬ 
less from the summary table at the end of this discussion. 

RECAPITULATION 


STATE 

PHYSICAL VALUE 

Capitalization 

Cost of 
Reproduction 

Present Value 

Total 

Per Mile 

Total 

Per Mile 

Total 

Per 

Mile 

Washington, 1905*.... 

$194,057,240 

$64,343 

$175,797,025 

$58,288 

$168,696,670 

$53,267 

South Dakota, 1908... 

106,494,503 

26,933 

91,695,132 

23,190 

138,850,297 

35,116 

Michigan, 1900. 

202,716,262 

25,946 

166,398.156 

21,298 

291,605,232 

37,323 

1907. 



204,033,500 

24,456 

357,555,907 

42,857 

Minnesota, 1907— 







Estimate A. 

411,735,195 

54,201 

360,480,160 

47,454 

300,027,696 

39,496 

Estimate B 1 .... 

373,820,141 

49,210 

322,565,107 

42,463 



Estimate B 2 .... 

360,961,548 

47,517 

309,706,514 

40,770 



Wisconsin, 1909..| 

296,803,322 

41,811 

240,718,711 

33,910 

311,819,128 

44,167 


*In Washington, a market value of $195,662,635, or $64,875 per mile, is also given. 


It should be kept clearly in mind by any one who uses the figures 
given in this pamphlet that this is not, and is not intended to be, 
a definite or an absolutely accurate statement of the relation of 
physical value to capitalization. Its purpose is to point out the 
difficulties of comparison of these two items within the limits of 
single states, and to resolve these difficulties so far as available 
statistics will permit. Further investigation would make possible 
the production of a multitude of illustrations of the injustice to the 
railways in most of these western states of the mileage pro-rate 
method of capital distribution. Although the figures given are those 
of physical value only, strong arguments might have been advanced 
































14 

for the capitalization of intangible values. But this pamphlet was 
not designed as a discussion of the principles which should apply 
in a valuation of railways, nor as an exhaustive discussion of the 
statistical elements involved. 


' • . . *« 2'f;^ $ a pg, 

> , , 't :f Jl ? '*’ k; 


■ 


~~ 


BUREAU OE 
RAILWAY ECONOMICS 








|w 




logan g. mcpherson 


FRANK HAIGH DIXON 

CHIEF STATISTICIAN 


Comment on the Decision 


IN THE 


Western Advanced Rate Case 
No, 3500 


11 


, 




' 5ff' 













BULLETINS OF THE 
BUREAU OF RAILWAY ECONOMICS 


1. Shtmnary of Revenues and Expenses of Steam Roads in the 

United States for July, 1910. (Monthly Report Series, 
Bulletin No; 1.) 

2. Summary of Revenues and Expenses of Steam Roads in tbe 

United States for August, 1910. (Monthly Report Series, 
Bulletin No. 2.) 

3. Summary of Revenues and Expenses of Steam Roads in the 

United States for September, 1910. (Monthly Report 
Series; Bulletin No. '&) 

4. -i Comparative Statement of Physical Valuation and Capitali- 

', zation. .' . ' 

-l i ieiimi.na.-iy;'. Bulletin for November, 1910—— Revenues and 
. Expenses. 

6; Railway Traffic; Statistics. 

7. Summary of Revenues and Expenses of Steam Roads in the 

United States for October, 1910. (Monthly Report Series, 
Bulletin No. 4.) 

8. Swmnqty of Revenues and Expenses of Steam Roads in the 

United States for November, 1910. (Monthly Report 

Series, Bulletin No. 5.) 

9. .Summary of Revenues and Expenses of Steam Roads in the 

United States for December. 1910. (Monthly Report 

Series, Bh&tin Np. 6.) - 

10. Summary of Revenues and expenses of Steam Roads in the 
V , United States for January, 1911. 

11. Comment on the Decision in the Western Advanced Rate Ca*e 

No. 3500. 


The numbering of the monthly bulletins as a separate series was abandoned 
with the December issue. Since then all bulletins issued by the Bureau have 
been given a consecutive number only. . 





COMMENT ON THE DECISION 

IN THE 

WESTERN ADVANCED RATE CASE. 
No. 3500. 


It is the purpose of this pamphlet to examine the arguments 
upon which rests the decision in the case, and to some extent the 
statistics upon which the arguments are based. It will therefore 
be helpful to analyze the opinion into its main divisions and 
consider the statistical bases and the arguments of each section 
together. It may be said that the purpose is not to discover 
inaccuracies in statistical detail when such inaccuracies do not 
affect the conclusions. Rather is it the purpose to determine 
whether figures have been improperly used, or whether important 
data have been left out of consideration. 

1. (pp. 2-10) The Legal Basis. 

The conclusion that the carriers must satisfy the mind of the 
Commission that the new rates are reasonable is purely legal and 
does not rest upon statistics. The nature of the subsequent 
statistical findings, however, affects the significance of this section. 


Note: Comment has been confined to the Western case because there are 
no points in the Eastern case requiring special attention that are not dupli¬ 
cated in the Western decision. The statistics have not been exhaustively 
checked. The figures of one road, the Chicago, Burlington & Quincy, have 
been carefully examined and the results obtained have been considered as 
typical with regard to the other roads. In other respects the statistics have 
been only roughly checked and only in cases where they had some direct bear¬ 
ing upon the argument. This pamphlet has been prepared for the information 
of the members of the Bureau, and has not been published in sufficient quantity 
for general distribution. 




2 


Inasmuch as the roads did not succeed in convincing the Commis¬ 
sion that the cost of transportation had seriously increased, it is of 
no consequence that the Commission considered the reasonableness 
of the advanced rates rather than the justification of the advance in 
the rates, for the general financial condition of the carriers had to 
be considered whichever way this legal question was decided, so 
long as the increased cost of doing business was not successfully 
proved. If the earners had shown an increase in their “cost of 
living” that impressed the Commission, then a restriction of the 
whole case to the justification of an advance would have benefited 
the position of the railways. 

2. (pp. 10—121 The Benefits of Regulation. 

The statistics quoted in this connection (page 12) may be criti¬ 
cised in that 1901 is not the dividing point between regulation and 
laissez faire. Why should these benefits be claimed for “regulation” 
rather than for the natural consolidations of railways? Legislation 
did everything it could to foster competition. Furthermore, it is 
said that net revenue per mile between 1901 and 1910 increased 
50%. The table shows an increase of only 33%. Even if we 
compare 1910 with 1900 instead of with 1901, as more accurately 
representing a ten year period, the percentage would fall short of 
50. This error doubtless arose from the fact that in comparing 
$2,951 and $3,913 attention was paid only to the 2 and j which 
differ by 50%. There are other examples of carelessness through 
expressions in round numbers. On page 52, for example, 70% is 
used for 61.9%, and 25 for 28%; and 30% is used for 26.5% on 
page 51. 

In the table on page 12, the figures will be found to differ some¬ 
what from those given under corresponding heads in the Statistics 
of Railways, but this is due to the adjustments necessary to make 
the years prior to 1908 comparable with 1908, 1909 and 1910 
under the new classification of operating revenues and expenses. 


3 


It is not necessary to discuss these adjustments, as the amount of 
the changes from the original figures could not affect the argument. 

3. (pp. 12-19) Railway Prosperity. 

The table on page 12 is used to indicate a general prosperity 
among railways. The method of using the figures is open to criti¬ 
cism. The statement that the net revenue increased $300,000,000 
in eight years and $109,000,000 in one year, does not necessarily 
mean anything more than that the transportation business is very 
large. To call net operating revenues “ net profits” is misleading. 
The opinion (page 17) shows that the “ net profits ” were only 
$1,270,881 greater in 1910 than in 1909, which makes no allow¬ 
ance for new investment. Whether an increase in net operating 
revenues in a series of years is excessive can only be determined 
when it is taken in connection with the increase in investment, 
which is a subject not adequately considered in the opinion. 

The table (page 13) showing the increase in dividends is taken 
from the annual reports of the Commission. It may be noted that 
the amount paid in dividends includes duplications resulting from 
intercorporate payments, but as the amount of stock paying divi¬ 
dends includes similar duplications, the average rate paid is proba¬ 
bly not misleading on account of such duplications. Why the 
calculation of the rate should be restricted to dividend paying 
stock is not exactly clear. It apparently assumes that all non¬ 
dividend paying stock is water and should be ruled out of consid¬ 
eration. But some watered stock may pay a dividend and, on the 
other hand, some of the non-dividend stock may represent unprofi¬ 
table but actual investment. A more enlightening method would 
be to print both the rate on dividend paying stock and the rate on 
all stock side by side. 

Incidentally we may note that as the book by Judge Noyes was 
published in 1905, it can hardly be quoted as showing the situation 
to-day. 


4 


In the quotation from the London Statist, the figures seem to 
to be based upon Poor’s Manual. It is said (page 16) that in ten 
years capital increased 41.5% and net receipts 79.3%. Capital is 
here used in the sense of capital stock. But the increase in net 
operating revenue should be compared with increase in total capi¬ 
talization—that is, bonds and stock—and not with capital stock 
alone. In 1909 the total railway capitalization (gross) was reported 
to be (Statistics of Railways, 1909, page 55) $17,487,868,935, and 
in 1899, $11,033,954,898 (Statistics of Railways, 1899, page 56), 
being an increase of $6,453,914,037, or 58.5%. How much of this 
increase is net in the hands of the public and how much is inter¬ 
corporate duplication, cannot be determined. 

4. (pp. 19-23) Railway Credit. 

In the main, the statistics in this section appear to check both 
with the annual statistical volumes of the Interstate Commerce 
Commission and with the ten year summary statements prepared 
by the Commission for the several roads in this rate hearing. 
Here, again, there are quotations of large figures which really 
prove nothing. It may be true that our railways borrowed upon 
mortgages in one decade more than twice as much as the national 
debt at the close of the Civil War, but this tells us nothing as to 
how much should have been borrowed to provide adequate railway 
facilities. That six Western roads borrowed over $450,000,000— 
more than the United States Government estimated will be neces¬ 
sary to build the Panama Canal—carries no conviction concerning 
the issue in the case. 

On page 19, the increase in funded debt is compared with the 
increase in mileage. These figures check with the Statistics of 
Railways, but it may be noted that the percent of increase in 
stocks and bonds together is not as great as for bonds alone. Rail¬ 
way credit involves both stocks and bonds. On page 21, the 
bonds of the Atchison, Topeka and Santa Fe are given as 
$380,000,000. This should be $300,000,000. 


5 


5. (pp. 24-28) Increase in Surplus and Extent of Justification 
for Accumulation of Surplus. 

The statement is made (page 24) that the carriers of the United 
States have accumulated unappropriated surplus in 1909, amount¬ 
ing to $800,642,923, whereas in 1899, this surplus was but 
$194,106,367. These figures are from the balance sheet, under 
Profit and Toss, in the annual statistical volumes. The significance 
of these figures is considerably diminished by the opinion itself 
when it says that in the last analysis a surplus is a matter of book¬ 
keeping. Very little of it is in the form of cash. “ Most of it has 
been expended in one way or another for improvements placed 
upon the property out of the income of the carrier.” 

The table on page 25 is misleading because the word surplus is 
used in a different sense from that on the preceding page. The 
Chicago, Burlington and Quincy is said to have a surplus in 1910 
of $72,592,760. This is not the surplus on the balance sheet, but 
is the “accumulated surplus brought forward from the preceding 
year,” increased by the “ net corporate income ” for that year and 
by the “ discounts on securities bought and sold and other profit 
and loss allocations,” and represents a final total out of which 
must be paid dividends, additions and betterments, etc. The 
opinion does not seem to bring out clearly the difference between a 
surplus in the balance sheet, which is a fund, and a surplus in the 
income account, which is an annual flow. In its tabulations, the 
Commission appears to have assumed that a surplus balance carried 
forward from year to year could be expended every year. Thus, if 
we have a balance of $500,000 in the first of ten years and carry 
that forward each year without increasing it in subsequent years, 
the Commission would say that, on an average for the ten years, 
there was a surplus of $500,000 a year to spend for the stockhold¬ 
ers ; whereas, in reality, the amount available each year would be 
only $50,000. 

The theoretical discussion regarding surplus is inconclusive and 


6 


seems to be nothing but a verbal quibble. In replying to Mr. 
Ripley’s statement that the Santa Fe should pay 6 percent on stock 
with another 6 percent for non-productive improvements, the 
opinion says (page 27) that this could not be generally applied 
because the relative amount of stocks and bonds is not the same in 
various roads. In a straightforward discussion of the merits of 
this theory, the Commission should have said that in the case of 
the Atchison the stock is not far from one-half the total capitaliza¬ 
tion. To generalize the discussion, the question becomes, should 
permission be granted to expend 6% on one-half the total capitaliza¬ 
tion, in non-productive improvements ? 

It is said that the maintenance accounts of these carriers practi¬ 
cally rebuild the road every ten years (page 28). The Chicago 
Burlington and Quincy spent for maintenance of way and struct¬ 
ures in ten years approximately $13,000 per mile. Would this be 
sufficient to rebuild that road ? 

6. (pp. 29-39) The Present Value of a Road as a Basis for 
Earnings. 

The conclusion of this section does not rest upon statistics. The 
logic is not convincing. The opinion says, “ Our position is that 
a railroad may not increase rates upon shippers, for the reason and 
as an outgrowth of the fact that it has accumulated out of rates a 
balance of profit which has been invested in the property ” (page 
34). And again, “ If the theory is to be recognized that by 
increasing the value of their property by putting back operating 
revenue into the property, a carrier may, as a legal right, increase 
rates, then the shipper is worse off each time he pays a rate which 
allows a revenue over and above a reasonable return upon the 
original investment” (pp. 34-35). 

There is confusion here. Whether a rate is just or not is one 
question ; what the carrier does with the proceeds of a rate allowed 
as legal, is another question. When the Interstate Commerce 


7 


Commission and the Courts have permitted a system of rates to 
stand as lawful, then the profits resulting from such rates belong to 
the stockholders. To choose to spend those profits for automobiles, 
is one way of disposing of them. If the stockholders forego the 
automobiles and provide additional shipping facilities, asking only 
a normal interest return upon the investment, is the shipper worse 
off? If, in the past, certain rate systems had been sanctioned with 
the understanding that a certain part of the profits therefrom 
should be set aside as a surplus for improvements never to be capi¬ 
talized, the situation would have been different, but such a promise 
was never exacted from the railways. 

Similarly in regard to the right to capitalize the increment in 
value due to the growth of the community. It might or might 
not be a wise policy for Congress to deny such a right in the future 
in the case of all or certain classes of business and farming enter¬ 
prises, but no such denial is recorded. For the Commission to 
make such a ruling is to assume legislative powers, and to apply 
such a rule to past increments is bad faith. 

In the table on page 37 (introduced by the Milwaukee road) there 
are minor discrepancies between the valuations there given for 
Minnesota and South Dakota and the figures found in other reports. 
In the text it is said that the Chicago, Burlington & Quincy was 
estimated in Wisconsin to have a value of #38,000 per mile new , 
and #32,000 per mile present value . The figures furnished to this 
Bureau by the Wisconsin Railroad Commission as of June 30, 
1909, give the Chicago, Burlington & Quincy in Wisconsin a cost 
of reproduction new of #11,120,539, and for the existing condition 
a value of #9,117,445, with a road mileage of 223.14. This gives 
per mile figures of #49,836.59 and #40,859.75 respectively. 

Regarding the estimated cost of constructing a main line in 
Kansas, it may be noted that there has apparently been no allow¬ 
ance for seasoning. It is understood that the Chicago, Milwaukee 
& Puget Sound does not begin passenger travel over its road until 


8 


two years after original construction because of the unsafe condi¬ 
tion of the road in its first months of existence. 

The tables on page 39 are hypothetical. Is not 4% too low an 
estimate of the cost to railways of interest on bonds? The valua¬ 
tions of $40,000 and $36,000 per mile for the Burlington are open 
to question. Furthermore, the “ return ” is simply operating 
income less interest on bonds, with no allowance for reserve, rents, 
sinking funds, etc. 

7 . (pp. 39-62) Reasonable Rates and Cost of Service. 

The power of the traffic manager is doubtless somewhat over¬ 
estimated in this discussion. He is limited by the fact that even 
to-day he does not have an absolute monopoly in all his territory. 
There are still competing centres of production and sale. The 
discussion is significant in the emphasis which is laid upon cost of 
service. The use made of the cost figures submitted by the various 
railway companies is not always consistent. Thus on page 50, it 
is recognized that although these figures u may not be sufficiently 
definite as to be authoritative upon the cost of carrying traffic, they 
clearly and unquestionably show the relative cost from year to year, 
because the same system of book-keeping and statistical accounting 
obtains throughout these periods of time.” Yet on page 53, these 
cost figures are compared directly with the revenue per ton mile, 
and the question is asked why the cost on one road is greater than 
on another. The fact that the ton mile revenue on the Burlington 
is stated to have been 8.5 mills when the ten year statement com¬ 
piled by the Commission shows it as 7.83 mills, is an error of no 
moment because the quotation of the ton mile rate at this point is 
itself absurd. These costs are not total costs, but simply operating 
costs. On page 50, it is said : “Cost, it will be noted, includes all 
operating expenses and taxes; not merely the cost of running a 
train over a track,” which tends to give the reader the impression 
that these statistics covered the whole cost of furnishing the 


service. 


9 


In the discussion of the Milwaukee’s statement of cost, we find an 
indorsement of Mr. Acworth’s formula regarding fixed and variable 
expenditures, with no recognition of the fact that this formula 
holds only within certain limits. It is said: u Certain expenses— 
for instance, maintenance of works—hardly increase at all” as the 
traffic increases. But we know after a certain density of traffic is 
reached a tremendous expenditure may be incurred for additional 
terminals, because of increased traffic. This feet receives distinct 
recognition in Mr. Prouty’s opinion. That the Commission 
did not read this part of the text carefully before sending it 
out is shown by the fact that the algebraic formula is incorrectly 
quoted, although the typographical error which appears in the 
original is faithfully reproduced. Mr. Acworth’s book gives it as 
^x+(^x-f5)=3x which should be >4x+(^xX5>=3x. In the 
statistics of expenditures quoted in this section there are no discre¬ 
pancies worth mentioning. 

8. (pp. 62—69) Six Months' Comparison. 

These tables have been checked only with respect to the Chicago, 
Burlington & Quincy. Only slight discrepancies appear. But it 
is doubtful whether the combined table on page 69 showing operat¬ 
ing income, justifies the tone of “ How much more are these rail¬ 
roads entitled to for the same service in the year 1911 than they 
were in 1910 or 1909?” In two of the roads there was a decline 
in the last six months of 1910, as compared with the same period 
in 1909, and that more of them do not show a decline is perhaps 
explained in part by the abnormally poor weather conditions of the 
latter part of 1909. Three of these roads show decreases in the 
first half of 1910 as compared with the same period of 1909. The 
monthly bulletin of the Bureau shows that a more comprehensive 
view of Western roads gives a decrease per mile of line for both 
halves of 1910 (calendar year) as compared with corresponding 
periods of 1909, the percent of decrease for the first half being 1.1 
and for the second 3.7. 


10 


9. (p. 69) The Poorer Roads. 

The question may be asked why the most prosperous roads 
should be made the standard rather than the poorer roads, or why 
some average between the two extremes should not be taken. 

10 . (p. 70) Conclusion. 

Much more attention appears to have been paid to statistics of 
operating revenues and expenses than to a detailed study of the 
needs of the railways in the way of extensions and improvements 
in the immediate future, which should show whether the rate of 
increase in these capital needs is justified by the extent to which 
net earnings will increase under present rates. Perhaps the carri¬ 
ers were at fault in not presenting adequate statistics upon this 
point, and perhaps, if such statistics had been presented, the result 
would not have been different. Perhaps the railways are really 
more prosperous than they thought, but certainly the statistics here 
reviewed are not an adequate presentation of the subject. It is to 
be regretted that there was not included in the exhibits a thorough¬ 
going study of railway economy which would show the exact 
relations between growth in revenues, traffic, and operating and 
capital expenditures. 


BUREAU OF RAILWAY ECONOMICS 

Established by Railways of the United States 
for the Scientific Study of Transportation Problems 



logan g. McPherson 

DIRECTOR 


FRANK HAIGH DIXON 

CHIEF STATISTICIAN 



The Conflict Between 
Federal and State Regulation 



Bulletin No, 15 
WASHINGTON, D, C. 
1911 








BULLETINS OF THE 
BUREAU OF RAILWAY ECONOMICS 


1. Summary of Revenues and Expenses of Steam Roads in the 

United States for July, 1910. (Monthly Report Series, 
Bulletin No. 1.) 

2. Summary of Revenues and Expenses of Steam Roads in the 

United States for August, 1910. (Monthly Report Series, 
Bulletin No. 2.) 

3. Summary of Revenues and Expenses of Steam Roads in the 

United States for September, 1910. (Monthly Report 
Series, Bulletin No. 3.) 

4. A Comparative Statement of Physical Valuation and Capitali¬ 

zation. 

5. Preliminary Bulletin for November, 1910—Revenues and 

Expenses, 

6. Railway Traffic Statistics. 

7. Summary of Revenues and Expenses of Steam Roads in the 

United States for October, 1910. (Monthly Report Series, 
Bulletin No. 4.) 

8. Summary of Revenues and Expenses of Steam Roads in the 

United States for November, 1910. (Monthly Report 
Series, Bulletin No. 5.) 

9. Summary of Revenues and Expenses of Steam Roads in the 

United States for December, 1910. (Monthly Report 
Series, Bulletin No. 6.) 

10. Summary of Revenues and Expenses of Steam Roads in the 

United States for January, 1911. 

11. Comment on the Decision in the Western Advanced Rate Case, 

No. 3500. (Out of Print.) 

12. Summary of Revenues and Expenses of Steam Roads in the 

United States for February, 1911. 

13. Summary of Revenues and Expenses of Steam Roads in the 

United States for March, 1911. 

(Continued on third page of cover.) 


The numbering of the monthly bulletins as a separate series was abandoned 
with the December, 1910, issue. Since then all bulletins issued by the Bureau 
have been given a consecutive number only. 




The Conflict Between 
Federal and State Regulation 
of the Railways 


WASHINGTON, D. C. 
JUNE, 1911 






PREFACE. 


A recent letter from Mr. Edwin A. Pratt, the English writer 
on railways, to the Director of the Bureau of Railway Eco¬ 
nomics, says: 

“I should very much like to have for the purposes 
of a work on which I am now engaged, a few facts as to 
the nature and extent of the control exercised by the 
various States—supplementing that of the Interstate 
Commerce Commission—on the railways of your coun¬ 
try. At a meeting last night of the Political Economy 
Club, to which I was invited as a guest, a discussion was 
started on the subject during which the view was ex¬ 
pressed that the control by the States was becoming so 
oppressive that it would be difficult for the country to 
avoid being forced into government ownership of the 
railways in the proximate future, and there was a very 
interesting debate thereon. 

“ Would it be troubling you too much to favor me 
with a few details which would enable me to state the 
position clearly ?” 

In the thought that the statement prepared in response 
to Mr. Pratt’s request may be of interest to the members 
of the Bureau, it is incorporated in this bulletin. 


THE CONFLICT BETWEEN FEDERAL AND STATE 
REGULATION OF RAILWAYS. 


For convenience of reference the provisions of the Consti¬ 
tution of the United States conferring and limiting the powers 
of Federal and State regulation of railways are set forth as 
follows: 

The Congress shall have power : * * * To regu¬ 

late commerce with foreign nations and among the 
several States, * * *. Section 8, Article I. 

This Constitution, and the laws of the United States 
which shall be made in pursuance thereof, * * * 

shall be the supreme law of the land, and the judges 
in every State shall be bound thereby, anything in the 
Constitution or laws of any State to the contrary not¬ 
withstanding. Paragraph 2, Article VI. 

The powers not delegated to the United States, by 
the Constitution, nor prohibited by it to the States, are 
reserved to the States respectively, or to the people. 
Amendment X. 

No person shall * * * be deprived of life, lib¬ 

erty or property, without due process of law; nor shall 
private property be taken for public use without just 
compensation. Amendment V. 

* * * nor shall any State deprive any person of 

life, liberty or property, without due process of law, 
nor deny to any person within its jurisdiction the equal 
protection of the laws. Section 1, Amendment XIV. 

The effect of these provisions of the Constitution upon the 
power of the Federal Government and the States to regulate 
railways may be summarized as follows: 

The Federal Government exercises delegated powers only; 
all powers not expressly delegated to it by the Constitution 


6 


or prohibited to the States may be exercised by the States. 
In the exercise of its delegated powers the Federal Govern¬ 
ment is supreme, but the power of a State over any matter 
as to which power has been delegated to Congress, is largely 
determined by the question of whether Congress has exercised 
its delegated power as affecting this subject-matter. If a 
Federal law is construed as regulating the whole of any 
subject-matter as to which power has been delegated to Con¬ 
gress or if State regulation conflicts with any Federal law, 
such State legislation is void. As the Federal Government 
is constantly exercising to a fuller extent the power to regulate 
interstate commerce, the necessary tendency is to restrict the 
powers of the States. 

Under Section 8, Article I of the Constitution, exclusive 
power to regulate railway operations, practices and charges 
affecting the transportation of persons or property where, in 
the course of such transportation, State lines are crossed, is 
delegated to the Federal Government, the only restriction 
upon its power in this field being the provision of Amendment 
V that 4 ‘No person shall be * * * deprived of life, lib¬ 

erty, or property, without due process of law; nor shall pri¬ 
vate property be taken for public use without just compen¬ 
sation. ’ ’ It follows that it is not within the power of Congress 
to impose regulations which shall have the effect of depriving 
the railway company of its property without due process of 
law or of taking its property without just compensation, and 
the United States Supreme Court has held that the use of 
property, in all legitimate ways, is as much a right of prop¬ 
erty protected by the Constitution as is the property itself. 

The power to regulate commerce wholly within a State, not 
having been delegated to Congress, is reserved to the States, 
respectively, under Amendment X of the Constitution. This 
gives to each State plenary power over all commerce or trans¬ 
portation which begins and ends within its borders, subject, 
however, to the provision of Section 1, Amendment XIV, which 
provides that no State shall “deprive any person of life, 
liberty or property without due process of law; nor deny to 


7 


any person within its jurisdiction the equal protection of the 
laws.” 

As, with few and unimportant exceptions, the railways of 
the United States are engaged in interstate commerce as well 
as in intrastate commerce, it is inevitable, under our dual sys¬ 
tem of government, that questions should arise as to the exact 
location of the line separating the jurisdiction of the Federal 
Government from that of the several States. This is fre¬ 
quently illustrated by questions as to whether the effect of 
regulations imposed by State authority may be to regulate 
or burden interstate commerce. It is the duty of all of the 
courts, State and Federal, to determine questions that arise 
as to whether an act of Congress is made in pursuance of the 
Constitution of the United States; and as to whether any 
provision of a State Constitution, or any act of a State Legis¬ 
lature is in violation of any provision of the Constitution of 
the United States. The United States Supreme Court is the 
final tribunal on all questions of Constitutional construction. 

As questions as to the extent of the regulative powers, both 
of the Federal Government and of the States, are constantlv 
being presented to the United States Supreme Court, the 
decisions of this court are gradually defining more sharply 
the extent of the Federal and State powers, respectively, and 
drawing the dividing line between them more clearly. The 
tendency of the decisions of this court seem to be strongly 
m the direction of the proposition that interstate railways 
must, in all substantial respects, be subject to one power, and 
the court now manifests a more decided tendency than in 
former years to hold that regulations of intrastate commerce 
which have the effect of regulating or burdening interstate 
commerce, are void as trenching upon the power delegated to 
Congress to regulate commerce among the States. There are 
some apparent exceptions to this, as in cases in which it has 
been held that, under its police power, a State may prescribe 
regulations affecting the movement of interstate commerce 
so long as such regulations only indirectly affect interstate 
commerce and do not regulate or burden it. An illustration 


of this is the enactment by a State prescribing tests for color¬ 
blindness for locomotive engineers engaged within that State 
in the operation of interstate trains. 

While each State possesses exactly the same power as to 
matters within its jurisdiction as is possessed by each of the 
other States, this power has been used in as many different 
ways as there are States in the Union, with the result that 
every interstate railway, in addition to being subject to the 
regulations imposed by the Federal Government, is subject 
to a different set of regulations in each State which it 
traverses. 

Some of the States have used only a small fraction of their 
power to regulate intrastate commerce; others have endeav¬ 
ored to go far beyond it and have been kept within bounds 
only by the courts. 

State regulative power has been exercised in a variety of 
ways. In some cases specific regulations have been enacted 
by State laws, and in other cases they have been prescribed 
by commissions under power delegated by the State Legis¬ 
latures. Regulations have been prescribed covering passenger 
and freight charges, train operation, car supply, character 
of equipment and station buildings, hours of labor of em¬ 
ployees and conditions of employment, safety appliances, and 
almost every conceivable phase of railway operation. 

State acts and regulations prescribing maximum charges for 
the transportation of passengers and freight have caused much 
of the litigation between the railways and the States, and have 
frequently been held to be unconstitutional on the ground that 
the charges prescribed were so low as to be confiscatory under 
the Fourteenth Amendment, that they would deprive the rail¬ 
way of a reasonable return upon the value of its property. It is 
the contention of some able lawyers that the courts must ulti¬ 
mately go farther and hold that under the Constitution of 
the United States, just as under the Common Law of England, 
the railway cannot be deprived by legislation of just and rea¬ 
sonable compensation for each specific transportation service; 
that small profits will not justify the making of a greater 


9 


charge, and that large profits will not justify a lesser charge 
being fixed by any governmental authority. It is contended 
that the right given to the railways by the present interstate 
commerce law to make a reasonable charge for each service 
is but the legislative expression of a Constitutional right. 

In some of the States efforts have been made to prevent the 
railways from testing the validity of State regulations in the 
courts. 

Minnesota, in a freight rate act, and North Carolina, in 
passenger and freight rate acts attempted to do this by pre¬ 
scribing such severe penalties for the violation of the acts as 
to force the companies to comply therewith rather than run 
the risk of failing to prove the invalidity of the acts in criminal 
prosecutions. The Supreme Court of the United States held 
all of these acts to be unconstitutional and void. 

Alabama, Arkansas, and Missouri attempted to keep the 
railways out of the United States courts by statutes which 
provided that any corporation chartered in any other State 
which should resort to a United States court should forfeit 
its right to do intrastate business in that State. These laws 
were overthrown by the United States Supreme Court as 
denying to the foreign corporations equal protection of the 
laws. 

Section 720 of the Revised Statutes of the United States, 
provides that “the writ of injunction shall not be granted by 
any court of the United States to stay proceedings in any 
court of a State * * With this provision in view, 

Virginia attempted to evade the jurisdiction of the United 
States courts by creating a Corporation Commission with the 
powers of a court and fixing railway charges by court decrees 
rather than by acts of a legislative nature. This failed to be 
sustained by the United States Supreme Court, as it was 
held that, in fixing railway charges, the Virginia Corporation 
Commission, notwithstanding its powers and its form of pro¬ 
cedure, was exercising legislative power and not judicial 
power. 

As would naturally be supposed, the States have been com- 


10 


peting with each other for the purpose of securing advantages 
of commerce within their respective borders over that of any 
other State and over interstate commerce. This rivalry has 
been strikingly manifested in laws and regulations affecting 
car service. These have generally been termed ‘‘ reciprocal 
demurrage’ 9 laws and have been based on the false theory that 
a demurrage charge imposed by a railway bears a reciprocal 
relation to a legislative penalty for failure to provide a car 
when demanded by a shipper. 

The natural effect of such laws in times of car shortage 
would be to compel an interstate road to discriminate in favor 
of intrastate commerce in the State imposing the highest pen¬ 
alties, as against intrastate commerce in other States and 
against interstate commerce. North Carolina has gone far¬ 
ther than any other State in legislation of this character, 
having enacted a law providing that, upon failure to provide 
a car within 48 hours after demand, the railway should pay 
$25.00 for the first day and $5.00 for each subsequent day, the 
penalty for failure to provide facilities for less than carload 
shipments being $12.50 for the first day and $2.50 for each 
subsequent day. Subsequent legislation reduced these penal¬ 
ties. It may be that if a State should go to such extremes in 
this direction as to create material discriminations against, 
or impose material burdens upon, interstate commerce, such 
penalty laws would be held to be unconstitutional and void. 

It will be seen that the effect of the recent decisions of the 
United States Supreme Court and of the fuller exercise of the 
legislative powers of Congress have been to give a broad con¬ 
struction to the clause of the Constitution delegating to the 
Congress power to regulate interstate commerce and to con¬ 
fine the power of the States within much narrower limits than 
those over which many of them have sought to exercise it. 
A recent decision by United States Circuit Judge Sanborn 
of the United States Circuit Court for the District of Minne¬ 
sota, goes so far in this direction that if it shall be sustained 
by the United States Supreme Court and carried to its logical 
conclusion, it would seem to restrict the opportunities of 


11 


the States for oppressive regulation. The Legislature of the 
State of Minnesota had enacted statutes reducing passenger 
fares within that State about 33 y 3 per cent and reducing 
freight charges on certain commodities within the State about 
7.37 per cent. By orders of the Minnesota Railroad and Ware¬ 
house Commission, general merchandise freight charges on 
shipments wholly within the State were reduced by from 20 
to 25 per cent and certain specific charges on freight shipped 
from distributing points just within the borders of the State 
to other points in the State were reduced. Suits were brought 
by shareholders of the railways affected by these legislative 
acts and orders of the Commission, against the railway com¬ 
panies, the Attorney General of the State, and the Members 
of the Railroad and Warehouse Commission to prevent them 
from maintaining the reduced fares and rates on the grounds 

(1) that the orders of the Commission and the acts of the 
Legislature described, substantially burdened and regulated 
interstate commerce on the railroads of these companies, and 

(2) that their necessary effect was the confiscation of the prop¬ 
erty of the companies. Judge Sanborn found that 4 ‘each of 
those acts and orders is violative of the Fourteenth Amend¬ 
ment of the Constitution and void.” He further found that 
“each of the acts and orders challenged has the natural and 
necessary effect substantially to burden and directly to regu¬ 
late interstate commerce, to create undue and unjust discrim¬ 
inations between localities in Minnesota and those in adjoin¬ 
ing States, and it is unconstitutional and void.” Interest in 
this decision centers in the finding last quoted above. 

In this case the companies for the first time made an effec¬ 
tive showing upon the facts as to the effect of State regula¬ 
tions upon interstate commerce and demonstrated that, al¬ 
though the regulations on their face related only to intrastate 
commerce, the effect of their application would necessarily 
be to require reductions of interstate charges. Upon this 
showing Judge Sanborn’s decision was founded on the follow¬ 
ing propositions: 

“To the extent necessary completely and effectually to pro- 


12 


tect the freedom of and to regulate interstate commerce the 
nation by its Congress and its courts may affect and regulate 
intrastate commerce, but no farther. 

“To the extent that it does not substantially burden or 
regulate interstate commerce a State may regulate the intra¬ 
state commerce within its borders, but no farther. 

“If the plenary power of the nation to protect the freedom 
of and to regulate interstate commerce and the attempted 
exercise by a State of its power to regulate intrastate com¬ 
merce, or the attempted exercise of any of its other powers, 
impinge or conflict, the former must prevail and the latter 
must give way, because the Constitution and the acts of 
Congress passed in pursuance thereof are the supreme law of 
the land, and ‘that which is not supreme must yield to that 
which is supreme.’ ” 

Charges for interstate transportation and for intrastate 
transportation on the railways of the United States are so 
intimately interwoven and are so closely interdependent that, 
should Judge Sanborn’s decision be sustained by the United 
States Supreme Court, it will substantially deprive the States 
of the power of fixing transportation charges. It would seem 
also that, if carried to its logical conclusion, it may prevent 
the States from enacting so-called “reciprocal demurrage” 
laws carrying penalties for failure to supply cars so severe 
as practically to compel the railways, in times of car shortage, 
to discriminate in favor of intrastate traffic. 

On the whole, the danger of control by the States “becoming 
so oppressive that it will be difficult for the country to avoid 
being forced into government ownership in the proximate 
future” is undoubtedly much less than it seemed to be a few 
years ago when the wave of drastic regulation was sweeping 
over the State Legislatures and commissions and their acts 
and orders had not yet been passed upon by the courts. 

Of course, as a practical matter, the powers reserved to 
the States include some which do not in any way conflict with 
the delegation to Congress of the power to regulate commerce 



13 


among the States and which may still be used to an unreason¬ 
able degree, or so as to become oppressive. 

By way of illustration, it may be mentioned that the com¬ 
missions in some of the States show a tendency to require 
unreasonable and extravagant expenditures by the railways 
in the provision of large and handsome passenger stations at 
relatively small towns and to make unreasonable requirements 
as to the maintenance of roadbed and equipment, as to the 
minimum number of employees to be assigned to the opera¬ 
tion of trains, as to the stopping of express trains at unimpor¬ 
tant stations. These powers might be exercised to an 
unreasonable and oppressive extent and it still be difficult to 
show that the results were confiscatory. 

It is possible, also, that the power of taxation may be so 
exercised by the States as to become in some degree oppres¬ 
sive. However, the exercise of this power must fall short 
of what the United States courts would find to be confiscatory, 
and it can not be so exercised as radically to discriminate 
against railway property without coming in conflict with the 
provision of the Constitution of the United States guarantee¬ 
ing the equal protection of the laws. The tendency in the 
direction of increasing taxation may be illustrated by citing 
the fact that for the fiscal year ended June 30, 1900, the rail¬ 
ways of the United States paid taxes levied under State, 
county, and municipal authority amounting to $48,332,273, 
while in 1910 such taxes amounted to $104,144,076. Part of 
this increase is to be accounted for by the increased mileage 
in 1910 as compared with 1900, but the average payments 
of taxes per mile in 1900 amounted to only $254.78 as com¬ 
pared with $435.65 in 1910, an increase in the ten years of 
$180.87 per mile or 70.9 per cent. 






* 










BULLETINS OF THE 
BUREAU OF RAILWAY ECONOMICS 


( Continued .) 

14. Summary of Revenues and Expenses of Steam Roads in the 

United States for April, 1911. 

15. The Conflict Between Federal and State Regulation of the 

Railways. 

16. Summary of Revenues and Expenses of Steam Roads in the 

United States for May, 1911. 

17. Railway Wage Increases for the year ending June 30, 1911, 
Retrenchment in the Railway Labor Force in 1911. 

18. Capitalization and Dividends of the Railways of Texas, Year 

Ending June 30, 1909. 









BUREAU OF 
RAILWAY ECONOMICS 


LOGAN G. MCPHERSON 

DIRECTOR 


FRANK HAJGH DIXON 

CHIEF STATISTICIAN 


Railway Wage Increases for the 
Year ending June 30,1911 

Retrenchment in the Railway 
Labor Force in 1911 


Bulletin No. 17 
WASHINGTON, D, C 
1911 





BULLETINS OF THE 
BUREAU OF RAILWAY ECONOMICS 


1. Summary of Revenues and Expenses of Steam Roads in the 

United States for July, 1910. (Monthly Report Series, 
Bulletin No. 1.) 

2. Summary of Revenues and Expenses of Steam Roads in the 

United States for August, 1910. (Monthly Report Series, 
Bulletin No. 2.) 

3. Summary of Revenues and Expenses of Steam Roads in the 

United States for September, 1910. (Monthly Report 
Series, Bulletin No. 3.) 

4. A Comparative Statement of Physical Valuation and Capitali¬ 

zation. 

5. Preliminary Bulletin for November, 1910—Revenues and 

Expenses. 

6. Railway Traffic Statistics. 

7. Summary of Revenues and Expenses of Steam Roads in the 

United States for October, 1910. (Monthly Report Series, 
Bulletin No. 4.) 

8. Summary of Revenues and Expenses of Steam Roads in the 

United States for November, 1910. (Monthly Report 
Series, Bulletin No. 5.) 

9. Summary of Revenues and Expenses of Steam Roads in the 

United States- for December, 1910. (Monthly Report 
Series, Bulletin No. 6.) 

10. Summary of Revenues and Expenses of Steam Roads in the 

United States for January, 1911. 

11. (Out of Print.) 

12. Summary of Revenues and Expenses of Steam Roads in the 

United States for February, 1911. 

13. Summary of Revenues and Expenses of Steam Roads in the 

United States for March, 1911. 

(Continued on third page of cover.) 


The numbering of the monthly bulletins as a separate series was abandoned 
with the December, 1910, issue. Since then all bulletins issued by the Bureau 
have been given a consecutive number only. 




Railway Wage Increases for the 
Year ending June 30, 1911 

Retrenchment in the Railway 
Labor Force in 1911 


WASHINGTON, D. C. 
AUGUST, 1911 
















































































































































































































































































































































































































































































































































































































































































































































































































































































































CONTENTS 


Page 

Railway Wage Increases for the Year 


Ending June 30, 1911. 5 

Retrenchment in the Railway Labor Force 
in 1911. 11 















RAILWAY WAGE INCREASES FOR THE YEAR 
ENDING JUNE 30, 1911. 


In response to a circular letter sent by the Bureau of Rail¬ 
way Economics to a number of railways, asking for an esti¬ 
mate of the increase in their wage bill for the fiscal year 1911 
as compared with 1910, replies were received from systems 
representing an operated railway mileage of 47,500 miles. 
These systems were the following: Atchison, Baltimore & 
Ohio, Chicago & Northwestern, Illinois Central, Missouri, 
Kansas & Texas, Norfolk & Western, Northern Pacific, Penn¬ 
sylvania, Southern Railway and Union Pacific. 

The data thus furnished to the Bureau has been tabulated, 
and the results are presented herewith. It will be understood 
that this study is merely preliminary, and its findings are to 
be taken only as indicating in a general way the trend of rail¬ 
way wages in 1911. Later returns for the fiscal year 1911 
when completed, will present the facts more fully and defi¬ 
nitely. 

In preparing their estimates, the railways included only 
such increases in total compensation to employees as were 
due to increased rates of pay, and excluded those due to en¬ 
largements in labor force. This was made easy by the fact 
that, as records on file in the Bureau seem to indicate, on five 
miles in every six of the operated railway mileage of the 
United States a smaller force is employed in 1911 than in 
1910. While the 1911 figures were sent to the Bureau before 
the close of the year, and are partially estimated, yet they 
are considered as approximately correct. 

A number of increases which were effective throughout the 
whole of the fiscal year 1911 took effect for the first time dur¬ 
ing the year 1910. As a result, the increase of 1911 over 1910 
does not appear so striking as would the increase of 1911 
over 1909 or 1908. Furthermore, a number of the increases 


6 


which were in effect June 30, 1911, took effect during 
the fiscal year 1911, and will not make their full force felt 
until the fiscal year 1912. Hence the increase of 1911 over 
1910 does not appear so marked as will that of 1912 over 1910. 
Therefore the showing in the following tabulations of wage 
increases for 1911 can be regarded as well within the facts. 

The wages paid in 1910 by the ten systems named above, 
on the 47,500 miles operated by them, amounted to $300,527,- 
000. The estimated wage bill of the same systems for 1911, 
computed for the same force of employees as in 1910, is $315,- 
163,000. The difference, $14,636,000, represents an increase 
of 4.87 per cent. 

A number of the responding railways arranged the wage 
increases on their lines according to groups or classes, and 
these classifications have been tabulated below. The first 
table (page 7) shows the increases distributed according to 
operating expense accounts, so far as the increases are re¬ 
ported in this manner. There are given in this table the 
mileage for which the particular facts were reported, the total 
compensation in 1910 and 1911 corresponding to that mileage, 
and the amount and percent of increase. 

The second table (page 8) shows the increases in the differ¬ 
ent classes of employees, so far as they are reported in this 
manner. Here again there are given the mileage, the total 
compensation in 1910 and 1911 corresponding to the given 
class and mileage, and the amount and percent of increase. 


Amount and percent of Increase in Compensation, 1911 over 1910 , Distributed by 

Operating Expense Accounts. 


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rates of pay, those due to enlargements in labor force being excluded. 























Amount and percent of Increase in Compensation, 1911 over 1910, Distributed by 

Occupation Classes. 


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rates of pay, those due to enlargements in labor force being excluded. 































9 


Grouping together the first four classes in the foregoing 
table as “trainmen,’’ the next two as "station men,” the 
next three as “shopmen,'’ and the next two as “trackmen,” 
we find the percentage of increase in wages between 1910 and 
1911 to be as follows: 


Group Percent of Increase 

Trainmen . 6.46 

Station men. 3.16 

Shopmen. 5.58 

Trackmen. 2.18 

Telegraph operators and dispatchers. 4.88 


As was to be expected, there was a considerable increase in 
the wages of shopmen, corresponding to the large increase 
shown under the maintenance of equipment account. Train¬ 
men received increases amounting to over 6 percent. Switch 
tenders, crossing tenders, and watchmen show wage increases, 
but the classification of employees as switch tenders and watch¬ 
men varies so much from road to road, and even on the 
same road from year to year, that the figures were too unre¬ 
liable to be tabulated. Increases for the other classes, how¬ 
ever, may be regarded as reliable indications of the tendency 
of railway wages at the present time. 
























































11 


RETRENCHMENT IN THE RAILWAY LABOR FORCE 
IN 1911. 

This study is the result of an attempt to ascertain what 
retrenchment in the number of men employed by the rail¬ 
ways has been made in 1911 as compared with 1910. As the 
annual reports of the railways to the Interstate Commerce 
Commission for the fiscal year 1911 will not be ready for some 
weeks to come, a number of typical railways were requested, 
under date of May 8, 1911, to prepare a statement of the num¬ 
ber of employees on their pay rolls on April 30, 1910, and on 
April 30,1911. 

The returns thus far received cover nearly 60 percent of the 
total operated mileage of the country and are as follows: 


Employees 

Total operated Total 100 miles 
mileage employees line 


April 30, 1911......... 139,755 987,790 707 

April 30, 1910*.137,671 1,069,570 777 

Increase . 2,084 - - 

Decrease. - 81,780 70 


per 

of 


It will be perceived that while the operated mileage of the 
railways covered by the study had increased during the year 
between April 30, 1910 and April 30, 1911, by 2,000 miles, or 
1.5 percent, the men employed in operating the increased 


♦For about 4,500 miles of line, on which it was stated that no retrenchment 
had taken place, the number of employees was reported as of June 30, 1910, 
instead of April 30. However, this should not affect the conclusions, as it is 
not probable that many changes in labor force occurred in the two months 
succeeding April 30. 







12 


mileage had decreased by nearly 82,000, or 7.6 percent. That 
is, the number of employees for every 100 miles fell during the 
year from 777 to 707, or 9.0 percent. For each 100 miles of 
line, the total number of employees was less by 70 men in 1911 
than in 1910. If conclusions may be drawn for the whole 
country from the reports of nearly 60 percent of the mileage, it 
would appear that during the year under consideration the 
labor force of the railways was cut by nearly one-tenth, as a 
result of effort to reduce expenses and effect economies at 
every point. 

Railways representing 19,706 miles of line reported the fol¬ 
lowing changes for the various operating expense accounts: 


Employees per 100 miles of line. 


Account 1910 

Maintenance of way.301 

Maintenance of equipment. 155 

Traffic . 6 

Transportation.262 

General * . 32 


1911 

Decrease 

231 

70 

151 

4 

6 

0 

233 

29 

32 

0 


♦Includes miscellaneous. 


It will be seen that the equipment, traffic, and general ac¬ 
counts remained practically stationary, but that considerable 
decreases occurred in maintenance of way and in conducting 
transportation. The number of maintenance of way em¬ 
ployees decreased 23.3 percent and of transportation employ¬ 
ees 11.1 percent. Reductions m maintenance of way force 
frequently but not necessarily indicate retrenchment One 
road reporting retrenchment stated, for example, that its re¬ 
duction in maintenance of way labor force was due directly 
to unfavorable weather conditions. But a decrease in em¬ 
ployees engaged in transportation can be due to but one of 
two things, or to both—decreased business or enforced 
economy. 






13 


Only a portion of the railways replying to the inquiries 
classified the changes in their labor force by occupation. These 
roads, which operate a total of 8,762 miles, reported changes 
as follows: 



Employees per 1000 miles of line. 

Occupation group. 

1910 

1911 

Decrease 

General officers. 

. 19 

19 

- 

Other officers. 

. 48 

49 

1 * 

General office clerks. 

. 241 

245 

4 * 

Station agents. 

. 154 

150 

4 

Other station men. 

. 455 

456 

1 * 

Enginemen . 

. 253 

248 

5 

Firemen. 

. 263 

254 

9 

Conductors . 

. 166 

167 

1 * 

Other trainmen. 

. 520 

496 

24 

Machinists. 

. 255 

245 

10 

Carpenters . 

. 216 

203 

13 

Other shopmen. 

. 816 

779 

37 

Section foremen. 

. 168 

169 

1 * 

Other trackmen. 

.1,390 

1,226 

164 

Switch tenders, crossing tenders and 



watchmen. 

. 143 

145 

2 * 

Telegraph operators and dispatchers 132 

130 

2 

Floating equipment. 

. 3.6 

2.3 

1.3 

All other employees. 

. 832 

779 

53 

Total. 

.6,077 

5,762 

315 


♦Increase. 


This table shows that a majority of the occupation groups 
remained practically stationary, either changing not at all, or 
increasing or decreasing to a very slight extent. The largest 
reductions in force are found among the trackmen, miscellane¬ 
ous employees, and among the shopmen. By combining the 
groups the changes will be brought out in bolder relief. 




















14 


Employees per 1000 miles of line. 

Main group. 1910 1911 Decrease 

Officers and general clerks. 309 313 4* 

Station men. 610 606 4 

Trainmen .1,202 1,165 37 

Shopmen .1,287 1,227 60 

Trackmen .1,559 1,395 164 

Switch tenders, etc. 143 145 2* 

Telegraph operators and dispatchers 132 130 2 

All other employees (including float¬ 
ing equipment). 836 781 55 


♦Increase. 


Trackmen per 1000 miles were reduced 164, or 10.6 percent; 
miscellaneous employees 55, or 6.6 percent; shopmen 60, or 
4.7 percent; and trainmen 37, or 3.1 percent. Maintenance of 
way, represented by trackmen, is here shown to have suffered 
the greatest reduction in the number of employees, followed 
by maintenance of equipment, which is represented by shop¬ 
men; while conducting transportation, represented by train¬ 
men, also underwent a decrease. Much the same relation¬ 
ship exists among the reductions in the operating accounts of 
roads that made only partial returns by occupations. The 
reductions reported by these roads, which have not been in¬ 
cluded with the reductions shown in the detailed tabulations 
just presented, center largely on the engineering department, 
maintenance of way, enginemen and firemen, and maintenance 
of equipment. 

If the data presented in the foregoing pages is representa¬ 
tive, and the Bureau has reason to think that it is, the conclu¬ 
sion seems clear that a considerable retrenchment in number of 
employees has been effected during the past year on the rail¬ 
ways of the United States—not only retrenchment per mile 
of line, but also a retrenchment in the whole number of employ¬ 
ees regardless of increased mileage. Not until the complete 
returns for 1911 are at hand will it be possible to make any 









15 


general or definite statement regarding this retrenchment; 
but the figures cited above show the reductions to be largely in 
maintenance of way, transportation, and maintenance of 
equipment forces. That is, the retrenchment in process by the 
railways at the present time has not only touched the forces 
which are always the first to suffer when retrenchment is 
necessary, but is also beginning to cut into the transportation 
forces, which are maintained at a full quota until rigid 
economy is demanded. 






BULLETINS OF THE 
BUREAU OF RAILWAY ECONOMICS 


(i Continued ,) 

14. Summary of Revenues and Expenses of Steam Roads in the 

United States for April, 1911. 

15. The Conflict Between Federal and State Regulation of the 

Railways. 

16. Summary of Revenues and Expenses of Steam Roads in the 

United States for May, 1911. 

17. Railway Wage Increases for the year ending June 30, 1911. 
Retrenchment in the Railway Labor Force in 1911. 














BUREAU Of 
RAILWAY ECONOMICS 


logan g. McPherson 

DIRECTOR 


FRANK HAIGH DIXON 

CHIEF STATISTICIAN 


. 


(. '■• ir. •• 





the Railways of Texas 
Year ending June 30,1909 




Hf- 

y'};. 7 


►‘v.'.t v yfA-ir < y'’v '-if* 

i 

• ■ i!™' ■ Ml 

m I f i 


•J;v 



Bulletin No. 18 

WASHINGTON, D. C. 







BULLETINS OF THE 
BUREAU OF RAILWAY ECONOMICS 


1. Summary of Revenues and Expenses of Steam Roads in the 

United States for July, 1910. (Monthly Report Series, 
Bulletin No. 1.) 

2. Summary of Revenues and Expenses of Steam Roads in the 

United States for August, 1910. (Monthly Report Series, 
Bulletin No. 2.) 

3. Summary of Revenues and Expenses of Steam Roads in the 

United States for September, 1910. (Monthly Report 
Series, Bulletin No. 3.) 

4. A Comparative Statement of Physical Valuation and Capitali¬ 

zation. 

5. Preliminary Bulletin for November, 1910—Revenues and 

Expenses. 

6. Railway Traffic Statistics. 

7. Summary of Revenues and Expenses of Steam Roads in the 

United States for October, 1910. (Monthly Report Series, 
Bulletin No. 4.) 

8. Summary of Revenues and Expenses of Steam Roads in the 

United States for November, 1910. (Monthly Report 
Series, Bulletin No. 5.) 

9. Summary of Revenues and Expenses of Steam Roads in the 

United States for December, 1910. (Monthly Report 
Series, Bulletin No. 6.) 

10. Summary of Revenues and Expenses of Steam Roads in the 

United States for January, 1911. 

11. (Out of Print.) 

12. Summary of Revenues and Expenses of Steam Roads in the 

United States for February, 1911. 

13. Summary of Revenues and Expenses of Steam Roads in the 

United States for March, 1911. 

(Continued on third page of cover.) 


The numbering of the monthly bulletins as a separate series was abandoned 
with the December, 1910, issue. Since then all bulletins issued by the Bureau 
have been given a consecutive number only. 





6 






Capitalization and Dividends of 
the Railways of Texas 
Year ending June 30, 1909 


WASHINGTON, D. C. 
AUGUST, 1911 


2 . 



















































































































































































































































































































































































































CAPITALIZATION AND DIVIDENDS OF THE 
RAILWAYS OF TEXAS. 


In this study, prepared by request, it has been the purpose 
to ascertain the capitalization of the railways of Texas, their 
dividends, and the proportion of non-dividend-paying stock, 
and to make a comparison in these respects with the railways 
of the United States as a whole, and with those of other sec¬ 
tions of the United States. 

The study is for the fiscal year ending June 30, 1909, the 
latest year for which requisite statistics are available. The 
data has been obtained from the annual report of the Railroad 
Commission of Texas and the statistical report of the Inter¬ 
state Commerce Commission. 

From the table which is printed hereafter with explanatory 
comment, it will be perceived that the capitalization of the 
Texas roads per mile is $32,070, or less than half the average 
for the whole United States, which is $73,829. It is of interest 
to compare this further with Interstate Commerce Commission 
Group V, which has the lowest capitalization per mile,* $46,364, 
and with Group II, which has the highest capitalization per 
mile, $147,300. It should be noted that these amounts repre¬ 
sent the gross capitalization per mile, in which are included 
duplications due to intercorporate ownership. The net capi¬ 
talization of the railways of the United States as a whole, that 
is, the gross capitalization less deductions due to the ownership 
of the securities of one railway by another, and less deduction 
of securities covering property other than railway property, 
is $59,259 per mile. The net capitalization of the railways 
in each group or in each state is not ascertainable. It has 
therefore been necessary in this comparison to use the figure 


*In the comparisons of Texas with the various groups, Group IX is omitted 
from consideration, because the State of Texas comprises the major part of 
Group IX and largely determines its character. 



4 


of gross capitalization. While it is likely that the net capitali¬ 
zation of the railways of Texas, if it were ascertainable, would 
not show the same relative reduction from the gross as that of 
the United States as a whole, it is significant that the gross 
capitalization per mile of the Texas lines is 45 per cent less 
than the net capitalization per mile of the railways of the 
country as a whole. 

On the same basis of comparison of gross figures, the table 
shows that the amount of stock per mile is $9,839 in Texas, 
$32,450 for the United States as a whole, $15,495 in the lowest 
group (Group V), and $65,456 in the highest group (Group II). 
The amount of bonds per mile is $22,231 for Texas, $41,380 for 
the United States, $30,869 for Group V, and $81,844 for 
Group II. 

The average rate of dividend on railway stock is lower in 
Texas than elsewhere. The average dividend paid in 1909 on 
the aggregate of dividend-paying and non-dividend-paving 
stock was less than three-tenths of one per cent. On the simi¬ 
lar aggregate of stock for the entire United States, the divi¬ 
dend rate averaged 4.2 percent. In the lowest group (Group 
IV) this dividend rate averaged 1.6 percent, and in the highest 
group (Group VII) 6.8 percent. That is, the average dividend 
rate on the total railway stock of the United States was more 
than seventeen times as high as that of Texas; in Group IV it 
was over six times as high, and in Group VII twenty-eight 
times as high. 

The low dividend rate on Texas stock would lead one to 
expect that the proportion of railway stock paying no divi¬ 
dends would be higher in Texas than in the country as a whole. 
This proves to be the fact to an extraordinary degree. The 
ratio that the stock of non-dividend-paying railways bore to 
the stock of all railways was 95.8 percent in Texas, in the 
United States as a whole, 29 percent, in the group with the 
highest ratio (Group IV) 58.7 percent, and in the group with 
the lowest ratio (Group I) 6.7 percent. It should be noted that 
for reasons given later in the discussion of the table, this com¬ 
parison of the proportion of stock not paying dividends is 


based on the total stock of dividend paying roads compared 
with the total stock of non-dividend-paying roads, and not on 
the issues of stock paying dividends compared with the issues 
of stock that paid no dividends. 

Certain discrepancies exist between the data published by 
the Texas Railroad Commission and that published by the 
Interstate Commerce Commission. If the higher figures given 
by the Interstate Commerce Commission had been used as the 
basis for the foregoing comparison, instead of the lower fig¬ 
ures of the Texas Commission, the amounts entering into the 
comparison would have been but little changed, and the rela¬ 
tion between the status in Texas and that in other parts of the 
country, not at all. Therefore it has not seemed necessary to 
present these discrepancies in the summary. 


6 


Capitalization and Dividend Returns of the Railways of Texa 

Year ending 

(United States and Group figures from Statistical Re 
Texas figures from 1909 report of tl 


GROUP. 

Mileage 

Owned. 

Stock. 

Bonds. 

1 

Amount. 

Per 

Mile. 

Amount. 

Per Mile. 

Texas . 

13,079.41 

$128,686,677 

$9,839 

$290,768,6266 

$22,231 

United States.. 

236,868.53 

7,686,278,545 

32,450 

9,801,590,390 

41,380 

Group I. 

7,950.14 

324,754,673 

40,849 

445,333,910 

56,016 

“ II. 

23,236.94 

1,520,991,520 

65,456 

1,901,806,200 

81,844 

“ III... 

24,880.48 

997,639,248 

40,097 

1,310,905,552 

52,688 

“ IV... 

14,880.97 

396,395,222 

26,638 

553,027,315 

37,163 

“ V. 

28,377.26 

439,709,547 

15,495 

875,969,066 

30,869 

“ VI... 

50,190.75 

1,398,398,631 

27,862 

1,594,510.949 

31,769 

“ VII.. 

13,638.76 

407,959,786 

29,912 

426,517,621 

31,272 

“ VIII. 

32,450.48 

883,554,572 

27,228 

1,297,095,370 

39,971 

“ IX... 

18,162.90 

318,121,840 

17,515 

448,028,456 

24,667 

“ X. 

23,099.85 

998,753,506 

43,236 

948,395,951 

41,056 


a The figures exclude switching and terminal companies. 
b Includes equipment trust obligations amounting to $7,956,426. 

c Includes $25,666,134 held in treasury, pledged as collateral secur: 
as follows: 


Group I 
“ II 
“ III 


$29,749 

8,327,444 

9,152,575 


Group IV 
“ V 
“ VI 























OF THE SEVERAL GROUPS : 


f the United States as a whole, and 
ne 30, 1909. 

of the Interstate Commerce Commission for 1909; 
exas Railroad Commission).a 


il Railway Capital¬ 
ization. 

Dividends Declared 
in 1909. 

Total Stock of Railways 
which Paid No Dividends 
in 1909 




Average 
Rate Based 


Percent of 

Amount. 

Per Mile. 

Amount. 

on Total 
Railway 
Stock of 
Group. 

Amount. 

Total Stock 
of All Rail¬ 
ways of 
Group. 

9,455,3036 

$32,070 

$307,850 

0.24 

$123,337,265 

95.8 

57,868,935 

73,829 

321,071,626 

4.2 

2,227,650,417c 

29.0 

r 0,088,583 

96,865 

19,575,320 

6.0 

21,739,094 

6.7 

22,797,720 

147,300 

71,484,423 

4.7 

420,996,237 

27.7 

>8,544,800 

92,785 

35,153,385 

3.5 

368,252,631 

36.9 

19,422,537 

63,801 

6,471,801 

1.6 

232,639,792 

58.7 

.5,678,613 

46,364 

9,251,150 

2.1 

253,874,556 

57.7 

>2,909,580 

59,631 

67,187,584 

4.8 

241,928,577 

17.3 

•4,477,407 

61,184 

27,793,005 

6.8 

28,166,800 

6.9 

10,649,942 

67,199 

25,029,670 

2.8 

232,382,171 

26.3 

•6,150,296 

42,182 

4,681,471 

1.5 

211,028,138 

66.3 

17,149,457 

84,293 

54,443,817 

5.5 

216,642,421 

21.7 


leld in sinking and other funds, etc. 


Amounts assigned to groups are 


•48,900 

'44,720 

'03,285 


Group VII $1,500 

“ VIII 2,486,386 

“ IX 155,675 

“ X 2,215,900 



























8 


The amount given in the table as representing the stock of 
all American railways on which no dividend was declared in 
1909 is $2,227,650,417, or 29 percent of the total stock outstand¬ 
ing. This amount is ascertained by adding together the total out¬ 
standing stocks of all railways that declared no dividends in 
1909. The corresponding item in the Interstate Commerce Com¬ 
mission’s statistical report for 1909, page 57, is $2,766,104,427, 
and the corresponding percentage 35.99 percent. The discrep¬ 
ancy between these two sets of figures is due to the fact that 
the Interstate Commerce Commission added together all issues 
of stock on which no dividends were paid, instead of the total 
stocks of all railways declaring no dividends. Thus the Inter¬ 
state Commerce Commission’s total includes a considerable 
amount of common stock of railways that paid a dividend on 
their preferred, but not on their common issues. It has proved 
impossible to secure from the Interstate Commerce Commis¬ 
sion or from its reports a statement of non-dividend-paying 
stocks in each group corresponding to the amount reported by 
the Commission for the United States, which has made it neces¬ 
sary to make up the item in the way described. For com¬ 
parative purposes this data is as valuable as that of the Inter¬ 
state Commerce Commission, for it gives information of the 
capitalization of railways paying no dividends whatever on 
their capital stock. 

Switching and terminal companies have not been included in 
the statistical reports of the Interstate Commerce Commis¬ 
sion since 1907. In order to make the statistics comparable, 
these companies have been omitted from the Texas figures. 

Certain differences exist between the returns of the Inter¬ 
state Commerce Commission when computed for the state of 
Texas and those of the Texas Railroad Commission. These 
differences fall into three main groups—differences due to 
variations in classification, differences arising out of the failure 
of roads to file reports, and differences in methods used in 
apportioning capital to those portions of interstate railways 
that lie within the state of Texas. Among the differences due 
to varying classification may be mentioned the inclusion of 


9 


notes, debentures, pledged bonds, and miscellaneous obligations 
with funded debt, and the inclusion of branches and spurs with 
miles of line. For all the roads failing to file operating state¬ 
ments with the Interstate Commerce Commission, mileage 
figures are reported by that Commission, but nothing more. 
Differences due to methods of capital assignment are as fol¬ 
lows. Where a railway lies in more than one group, the 
Interstate Commerce Commission usually apportions the cap¬ 
italization of such road among the several groups in the pro¬ 
portion of the mileage lying within the respective groups. The 
Texas Railroad Commission, however, apportions the capitali¬ 
zation of each railway entering or passing through the state on 
its own merits; that is, on the basis of what it considers to be 
the proper valuation of that part of the railway lying in Texas. 
As the tendency of the Texas Commission is always toward a 
low valuation, it is not strange that it assigns a lower capitali¬ 
zation to the Texas portion of the interstate railways than 
does the Interstate Commerce Commission. 

This study, the method of which was determined in the 
request for its preparation, was based, as already shown, upon 
the Texas Railroad Commission’s figures. Yet the discrepan¬ 
cies between the Texas Commission figures and the Interstate 
Commerce Commission figures, the reasons for which have 
already been explained, are not sufficient to vitiate in any 
respect the conclusions of this study. It does not therefore 
seem worth while to present in detailed tables the statistical 
variations in the two reports. 
















BULLETINS OF THE 
BUREAU OF RAILWAY ECONOMICS 


( Continued.') 

14. Summary of Revenues and Expenses of Steam Roads in the 

United States for April, 1911. 

15. The Conflict Between Federal and State Regulation of the 

Railways. 

16. Summary of Revenues and Expenses of Steam Roads in the 

United States for May, 1911. 

17. Railway Wage Increases for the year ending June 30, 1911. 
Retrenchment in the Railway Labor Force in 1911. 

18. Capitalization and Dividends of the Railways of Texas, Year 

Ending June 30, 1909. 












BUREAU OF 
RAILWAY ECONOMICS 


logan g. McPherson 

DIRECTOR 


FRANK HAIGH I 
CHIEF STATISTIC! 


The Cost of Transportation 
the Erie Canal and 
by Rail 


Bulletin No. 21 

WASHINGTON, D, C. 



on 




BULLETINS OF THE 
BUREAU OF RAILWAY ECONOMICS 


. Summary of Revenues and B^xpenses of Steam Roads in the 
United States for July, 1910. (Monthly Report Series, 
Bulletin No. 1.) 

!. Summary of Revenues and Expenses of Steam Roads in the 
United States for August, 1910: (Monthly Report Series, 
Bulletin No. 2.) 

3. Summarv of Revenues and Expenses of Steam Roads in the 

United States for September, 1910. (Monthly Report 
Series. Bulletin No. 3.) 

4. A Comparative Statement of Physical Valuation and Capitali¬ 

zation. 

■ 5 . Preliminary 'Bulletin for November, 1910—— Revenues and 
Expenses. 

. . A;: V y-.A ■ i; v ’ > 

• 6. Railway Traffic Statistics. 

7. Summary of Revenues and Expenses of Steam. Roads in the 
United States for October, 1910. (Monthly Report Series, 

? Bulletin No. 4.) 

S Summary of Revenues and Expenses of Steam Roads in the 
United States for November, 1910. (Monthly Report 
Series, Bulletin No. 5.) 

9. Summary of Revenues and Expenses of Steam Roads in the 
United States for December, 1910. (Monthly Report 
Series, Bulletin No. 6.) 

10. Summary of Revenues and Expenses of Steam Roads in the 

United States for January, 1911. 

11. Comment on the Decision in the Western Advanced Rate Case. 

No. 3500. (Out of Print.) 

12. Summary of Revenues and Expenses of Steam Roads in the 

United States for February, 1911. 

13. Summary of Revenues and Expenses of Steam Roads in the 

United States for March, 1911. 

{Continued on third page of caver.) 


The numbering of the monthly bulletins as a separate series was abandoned 
with the December, 1910 , issue. Since then all bulletins issued by the Bureau 
have been given a consecutive number only. 

*3841 •• 11 ® i m il III mmm S 









The Cost of Transportation on 
the Brie Canal and 
by Rail 


WASHINGTON, D. C. 
OCTOBER, 1911 


THE SOURCES OF INFORMATION utilized iu the preparation 
of this study are the following: 

Annual reports of the New York State Superintendent of 
Public Works. 

Annual reports of the New York State Comptroller. 

Annual reports of the New York State Engineer. 

Report of the Committee on Canals of New York State 
(Greene Committee), 1899. 

Reports of the Inland Waterways Commission, the United 
States Census Bureau, Bureau of Corporations, and Inter 
state Commerce Commission. 

A. Barton Hepburn—Artificial Waterways and Commercial 
Development, (New Y"ork, 1909). 

Publications of the Buffalo Historical Society. 

Articles by Secretary John A. Fairlie of the Greene Com 
mittee. ‘ 

Personal interviews with the statistician to the New York 
State Superintendent of Public Works, assistants in the 
offices of the New York State Comptroller and State 
Engineer, and others. 


SUMMARY. 


A comparison of the cost of transportation by canal and by rail 
should include not only the immediate cost of conveyance, but also 
the cost of capital, of operation, and of maintenance. 

Since 1882 the canals of the state of New York have been main 
tained and operated at the expense of the state for the free passage 
of boats, the only charges paid by the shipper by canal being those 
of the boatmen for conveyance. This does not mean that the fixed 
charges and cost of maintenance are obliterated but that they are 
borne by the community as a whole instead of by the shipper. 

Official data indicates that up to 1905 the cost of the Erie Canal 
was about 157,000,000 or $163,600 per mile. 

If only four per cent be allowed for interest charges and extraor 
dinary repairs and depreciation on the Erie Canal, and its total 
cost be taken at only $55,000,000, the annual fixed charge for these 
purposes is $2,200,000. This may be termed the aggregate cost of 
capital reduced to an annual basis. 

As nearly as can be computed from ascertainable data the expense 
of maintaining the Erie Canal borne by the state of New York 
for the year 1909 was $672,105. 

As nearly as can be computed from ascertainable data the average 
ton-mile charge made by the boatmen for conveyance of traffic over 
the Erie Canal is 2 mills. 

A liberal estimate of the traffic on the Erie Canal for the year 
1909 is 435,000,000 ton miles. 

Apportionment of the aggregate annual cost of capital to this 
ton mileage gives 5.06 mills per ton mile. The cost of maintenance 
likewise apportioned gives 1.55 mills per ton mile. These items 
added to the immediate charge for conveyance of 2 mills make the 
total cost of transportation of freight on the Erie Canal 8.61 mills 
per ton mile. 

For the same year of 1909 the average freight receipts were 6.2 
mills per ton mile by the New Y T ork Central, 6.1 mills by the Erie, 
7.4 mills by the Lackawanna, and 6.4 mills by the Lehigh Valley. 

Whichever one of these various railway average receipts per ton 


4 


mile be taken, the cost of transportation on the Erie Canal exceeds 
it by from sixteen to more than forty per cent. 

These average rail receipts moreover include returns from high 
grade merchandise such as is not carried in any quantity on the 
Erie Canal. The traffic of the Erie Canal is composed princi 
pally of grain, lumber, iron and iron ore, stone, and coal. The 
receipts of the railways from such traffic are lower than their aver 
age receipts, and therefore the ratio of rail receipts to canal receipts 
on the kind of traffic that is carried by canal is lower than the above 
percentages indicate. 

The railways moreover are in service all of the time while the 
canal is idle an average of four and one-half months of each year. 

It is impossible at this time to compute or even estimate what the 
total cost of transportation will be on the new barge canal into 
which the Erie Canal is being transformed. The Greene Committee 
of 1899 estimated the cost of the barge canal at about $60,000,000. 
Already more than $100,000,000 have been appropriated for the pur 
pose, and it seems probable that another $19,000,000 will be required 
for terminals. 


The Cost of Transportation on the Erie Canal 
and by Rail. 

In the wide discussion regarding canals and inland waterways in 
this country during the past few years, little attention has been 
directed to the total cost of canal transportation. The term “total 
cost” is here used to cover not only the immediate cost of conveying 
goods, but also the cost of maintenance of the canal, cost of ordinary 
repairs, and fixed charges, dividends, and depreciation charges, if any. 

Freight rates via the Erie Canal are frequently contrasted with 
freight rates via railway, but as they comprise only the immediate 
transportation cost, that is, the direct charge for conveyance alone, 
they are hardly comparable with railway rates, which provide the 
revenue from which must be met not only the cost of conveyance, but 
also fixed charges upon the capital invested in the plant and the 
expense of maintenance of plant and equipment. All tolls on New 
York State canals were abolished in 1882, and the canals since that 
date have been maintained and operated at the expense of the state 
for the free passage of boats. Thus the only charges made against 
a shipper of goods by canal are those of the boatman who handles 
the goods, and these charges do not help to pay for the maintenance 
of the canal or for repairs. From the shipper’s point of view a canal 
rate of two mills a ton mile is unquestionably preferable to a railway 
rate of six mills, if speed and convenience of handling are not as 
important to him as a low rate. It will be shown, however, that 
from the broader point of view of the community the railway rate, 
although apparently higher, may not actually be so. The maintenance 
and fixed charges on the canal, which are borne by the community, 
may amount to more than the difference of four mills per ton mile, 
which is the immediate saving to the shipper. This raises the ques 
tion whether the burdening of the entire community for the benefit 
of the shippers, who constitute only a portion of it, is justified. But 
leaving this question aside, a fair comparison of the cost of trans 
portation by canal and by rail should certainly be of aggregates that 
include every element in those respective costs. 

This study is an effort to estimate the total cost of transporting 
a ton of freight one mile on the Erie Canal at the present time, and 
to compare that cost with typical or average railway ton-mile freight 


6 


receipts. To reach an estimate of transportation cost on the Erie 
Canal, it has been necessary to ascertain three items in that cost : 
hrst, fixed charges on the canal, or cost of capital; second, cost of 
maintenance; third, immediate cost of transportation. The sum of 
these three items will give, fourth, the total cost of transportation. 

The Erie Canal is a product of state enterprise, paid for from 
funds obtained for the most part through loans made by the State of 
New York. These loans have to a large extent been repaid, partly 
out of the revenue from the canal, and partly from sinking funds 
established and built up through taxation. Because of this liquida 
tion of the canal debt, interest charges paid by the state on behalf 
of the canal have till recently been comparatively small. The canal 
represents, however, the investment of the people of the State of New 
York in a transportation plant, just as a railway represents an 
investment on the part of its stockholders and bondholders. In 
ascertaining canal transportation costs that shall be strictly com¬ 
parable with railway transportation costs, it will therefore be neces 
sary to arrive by some method at the physical value of the Erie 
Canal today and on that value compute fixed charges, representing 
interest on the investment and depreciation. 

But how estimate the value of the canal? There are two ways: 
first, to take the total cost of construction and permanent improve¬ 
ments to date or, second, to make a physical valuation of the whole 
canal property. Clearly, it is impossible to value the property with¬ 
out a careful appraisal. The statement so frequently made during 
the New York State canal campaign of 1903 that the Erie Canal, as 
it stood, was worth more than the total amount expended on it since 
its inception, cannot be accepted without proof, especially as value 
depends so definitely on performance. The canal is not of value 
except as a canal, and as a canal is valuable only in proportion to 
the service rendered by it. It is feasible, however, to ascertain the 
total cost of construction and improvement of the Erie Canal as a 
measure of its present value. 

Complete official data showing the cost of the Erie Canal to 1905, 
the year when work on the new barge canal was commenced, are not 
available. The canal auditor of the State of New York, in his annual 
report for 1882, stated the total cost to that year as $49,592,000. 
From 1882 to 1905 a number of special appropriations were made by 
the New York legislature for the purpose of improving the state 


7 


canals, chiefly by deepening the channels and lengthening the locks. 
Among these appropriations was one of $9,000,000, made in 1895 for 
the purpose of increasing the lock capacity and depth of the Erie, 
Champlain and Oswego canals. Of the amounts spent under the 
latter appropriation up to July 15, 1898, more than five-sixths, or 
$0,787,000, was expended on the Erie Canal.* What proportion of 
the other appropriations was applied to the Erie Canal it is not 
possible to ascertain, but the share of that canal in the total was 
considerably over one-half. The Greene Committee estimated that 
the cost of constructing and improving the Erie Canal down to 1896 
had amounted to $56,165,000.1 It is probable, therefore, that Hep¬ 
burn’s estimate of $57,600,000$ as the total cost to 1905 is well under 
the truth. On the basis of $57,600,000, the cost of the Erie Canal 
up to 1905 was $3 63,600 a mile, which may be compared with the 
cost of road per mile of the four main trunk lines between Buffalo 
and New York—New York Central, Erie, Lackawanna, and Lehigh 
\ alley. The cost of road per mile of these railways, according to the 
reports made to the Interstate Commerce Commission for 1905, was 
as follows: 


New York Central.$181,250 

Erie . 292,970 

Lackawanna. 90 240 

Lehigh Valley. 60,490 


Average.$212,716 


Canal construction is far more expensive than is ordinarily appre¬ 
ciated, as is seen from the foregoing comparison. 

It will now be possible to estimate the total cost of transportation 
on the Erie Canal, made up of the three items already enumerated: 
cost of capital, cost of maintenance, and immediate cost of transpor¬ 
tation. 

First. Cost of Capital: Taking four per cent as the rate of upkeep 
on the Erie Canal—an item intended to provide for interest charges 
and for extraordinary repairs and depreciation—and using a con- 

* Report of Committee on Canals of New York State, 1899 , p. 162 . This com¬ 
mittee is commonly known as the Greene Committee. 

fReport, p. 153 . 

$A. Barton Hepburn: Artificial Waterways and Commercial Development 

p. 100. 












8 


servative estimated value of but $55,000,000 for the canal at the 
present time, instead of the $57,600,000 cited above, we have a total 
annual fixed charge of $2,200,000. This amount will be apportioned 
per ton mile of canal traffic in 1909 in a later paragraph. 

Second. Cost of Maintenance: The cost to the state of New York 
of maintaining the Erie Canal in 1909, according to data contained 
in the annual report of the Superintendent of Public Works of that 
state,* amounted to $672,105. This amount is ascertained by adding 
to the $500,551 of operating expenditures and ordinary repairs a 
proportion, obtained by pro-rating on the basis of comparative expense, 
of the total general and division expenses of the canals of the state. 
This added charge covers administrative and supervisory expenses. 
The reduction of this item of maintenance to a ton-mile basis will be 
made shortly. 

Third. Immediate Cost of Transportation: This is composed of 
the boatmen’s charges for conveyance. Canal boat rates vary con 
siderably with the season, the condition of traffic, and the attitude 
of the boatmen. There are so few owners of boats on the Erie Canal 
at present that they can regulate boat rates practically at will. The 
actual cost incurred by the boatmen in conveying wheat on the Erie 
Canal was estimated by the Greene Committee of 1899f at 1.75 mills 
per ton mile. This estimate covers interest at five per cent on invest¬ 
ment in boatp*, all expenses for wages of boathands, and repairs, 
deterioration and insurance on boats, without allowance, however, 
for profit to the boatmen. The average rate on wheat from Buffalo 
to New York during the season of 1909 varied from 2.07 mills per 
ton mile! in July to 3.33 mills in October and November; and on 
corn from 1.87 mills to 3.07 mills. The average for the season was 
2.60 mills per ton mile on wheat and 2.35 mills on corn. These rates 
differ by less than one-half of one per cent from the average of the 
rates reported by the Superintendent of Public Works for the years 
1900 to 1909, and may therefore be considered as representative. 
The foregoing rates and estimates apply to grain only. For 
all commodities moved on the canals of New York State, the 
average ton mile rate between 1903 and 1907 was 2.00 mills.§ An 


♦Report for 1909, pp. 31-39. 

fReport of Committee on Canals of New York State, 1899, p. 57. 
^Ascertained by reducing the through rate per bushel to a ton-mile basis. 
§Hepburn, p. 104. 



9 


estimate of 2.00 mills for the average ton-mile rate on the Erie 
Canal today would therefore seem to be a reasonable one. This 
represents the immediate charge for conveyance. 

Fourth. Total Cost of Transportation: Of the three components 
of transportation cost so far discussed, two have been gross amounts 
for the Erie Canal as a whole, while only the last is expressed in 
terms of ton-mile traffic. To reach a figure of total cost per ton per 
mile it will be necessary to ascertain the total ton mileage of the 
traffic on the Erie Canal in 1909, and reduce the first two amounts to 
a ton-mile basis. 

Unfortunately, no ton-mileage figures are reported for the canal 
traffic in New York State at the present time. It will be necessary 
to make an estimate for the Erie Canal based upon the reports 
of tonnage carried. The total number of tons of freight carried 
on the Erie Canal in 1909 was 2,031,307. What proportion of this 
was through freight was not reported, but if the proportion was 
the same as in 1908, then 436,731 tons consisted of through freight, 
and 1,594,576 tons of way freight. If we assume that way freight 
was carried an average of half the length of the canal, or 176 miles— 
which is a liberal assumption—and that all the through freight was 
carried the whole length of the canal, or 352 miles, we have a total 
ton mileage of 435,000,000 for 1909. 

On the basis of 435,000,000 ton miles of traffic in 1909, the fixed 
charges or cost of capital, $2,200,000, were equivalent to 5.06 mills 
per ton mile; and the cost of maintenance, $672,105, to 1.55 mills 
per ton mile. The total cost of transporting one ton of freight one 
mile on the Erie Canal in 1909 was made up, then, of the following 
items : 


Cost of capital.5.06 mills 

Cost of maintenance.1.55 ” 

Immediate cost of transportation.2.00 ” 

Total .8.61 mills 


Thus there is obtained a total charge for canal transportation of 
8.61 mills per ton mile, directly comparable with a railway freight 
rate. What railway freight rate or receipt shall be quoted in com¬ 
parison with this 8.61 mills of canal cost? By the four principal 
railways running between Buffalo and New York freight receipts 






10 


per ton mile in 1909 were reported to the New York State Public 
Service Commission as follows: 

New York Central 

Erie . 

Lackawanna. 

Lehigh Valley.... 

Whichever one of these various railway average receipts per ton 
mile be taken, the cost of transportation on the Erie Canal will be 
found to exceed it by from sixteen to more than forty per cent. Even 
when compared with average railway receipts for the whole United 
States, the Erie Canal cost of transportation is considerably the 
higher. Thus average freight receipts per ton mile in 1909, for all 
the railways of the United States, amounted to 7.63 mills, as com 
pared with 8.61 mills of cost on the Erie Canal. For specific com¬ 
modities the result is similar. The Interstate Commerce Commis¬ 
sion reports that average railway freight receipts in 1909, for four 
of the commodities which make up a large part of the Erie Canal 
traffic, were as follows: 


Grain .6.11 mills 

Lumber .7.70 ” 

Anthracite coal.6.03 ” 

Bituminous coal.5.12 ” 


None of these averages, it will be observed, is as high as the aver¬ 
age cost of transportation via the Erie Canal. 

All this is true despite the very conservative estimates in making 
up the figures for the Erie Canal—and this conservatism is worthy 
of special emphasis. Thus the ton mileage estimate used is probably 
too large, and the ton-mile canal rates based on that estimate are 
correspondingly low. In the opinion of the statistician to the New 
York Superintendent of Public Works, the average length of haul 
of way freight over the Erie Canal is not over 100 miles, yet the 
estimate here adopted is 176 miles. Again, four percent is a con 
servative rate for depreciation and interest. The stock and bonds 
of all the railways in the United States in 1909 had an average divi 
dend and interest rate alone that exceeded four per cent, and an 
allowance of four percent for both interest and depreciation charges 


6.2 mills 
6.1 ” 

7.4 ” 

6.4 ” 










11 


in connection with the Erie Canal, is, in comparison, clearly a 
minimum. Finally, the estimate of value of the Erie Canal property 
used in the computation is considerably lower than the estimates of 
the Greene Committee and of other careful students of canal history. 

Another fact that must be recognized in a comparison of railway 
and canal transportation costs is that the grade of goods shipped 
via canal is far inferior to that shipped via railway. The goods sent 
by canal are heavier, coarser, of less value, and naturally are car 
ried at a lower average rate. Of the tonnage carried over the New 
York canals in 1909, for example, nearly a third (31.8%) consisted 
of stone, rock, lime and clay; another third (36.6%) consisted of 
coal, iron ore, pig iron, boards, timber, pulp wood and wood pulp; 
while a fifth (21.2%) was made up of grain, ice and salt. It is clear 
that an average railway freight rate based only on such articles as 
were carried by the Erie Canal in 1909 would be lower than the 
average freight rate on all articles carried by railways. The compu¬ 
tations made above, therefore, result in an average canal rate lower 
than if the grade of articles carried by the canal averaged as high 
as on the railways. Notwithstanding this, the average canal rate, as 
has been shown, is actually higher than the highest average railway 
freight receipt quoted. 

One cause of the high cost of transportation on the Erie Canal is 
the fact that the canal remains idle so large a part of each year. 
The average length of the canal season is 223 days, or about 7V 2 
months. During the remainder of the year the plant and the boats 
lie practically idle, although all of the general and many of the 
maintenance expenses continue without change. In the estimate of 
the Greene Committee regarding the actual cost of transportation, 
allowance was made for this period of idleness by computing all 
expenses on the basis of only seven round trips a year—a full load 
on the down trip and a third of a full load on the return. But in 
estimating depreciation and interest charges no such allowance can 
be made—the plant is in existence and must be maintained, whether 
in operation or not. Whether or not this long period of idleness each 
year on the part of the canal is responsible for a large or a small 
part of the greater cost of canal as compared with railway trans 
portation, it is an inherent feature of canal business in the state of 
New York and must be taken into account when comparing the 
canals and railways of that state. 


12 


This study has been limited to the Erie Canal of today, all the 
statistics being based on past performances of record. The peoph 
of the state of New York are now engaged in spending more than 
1100,000,000 in the enlargement and improvement of the canal sys¬ 
tem of their state. What the total cost of transportation on the 
new barge canal now emerging from the old Erie will be, no one is 
in a position to know definitely. The Greene Committee of 1890 
estimated the cost of the barge canal at about $60,000,000. Already 
more than $100,000,000 has been voted for this purpose, with the 
possibility that another $19,000,000 will be required for terminals. 
The Greene Committee also made an estimate of the cost to the boat¬ 
men of conveying goods through the barge canal, corresponding to 
their estimate of 1.75 mills on the old Erie referred to in an earlier 
paragraph. The estimate on the barge canal was 0.52 mill. Whether 
this estimate will prove to be approximately accurate, or whether 
time will show it to have been too low, no one at the present time can 
tell, as no facts exist on which even an approximation may rest. Tt 
is clear, however, that having added so greatly to the cost of the 
canal, rates must be much lower, or volume of traffic far greater, or 
cost of maintenance and repair lower in proportion to volume of 
traffic—one or all of these must result before the total cost of trans 
portation on the new Erie will fall to or below the level of the 
average railway freight rate. 

It seems clear, then, from the data presented in the foregoing 
pages, that the transportation of goods on the Erie Canal at the 
present time is a more expensive process, considered from the broad¬ 
est point of view, than on the typical or average American railway, 
whether or not that railway be one that competes directly with the 
canal. 


BULLETINS OF THE 
BUREAU OF RAILWAY ECONOMICS 


( Continued .) 

14. Summary of Revenues and Expenses of Steam 

United States for April, 1911. 

15. The Conflict Between Federal and State Regulation of the 

Railways. 

16. Summary of Revenues and Expenses of Steam Roads in the 

United States for May, 1911. 

17. Railway Wage Increases for the year ending June 30, 1911.’ 
Retrenchment in the Railway Labor Force in 1911. 

18. Capitalization and Dividends of the Railways of Texas, Year 

Ending June 30, 1909. 

19. Summary of Revenues and Expenses of Steam Roads in the 

United States for June, 1911. 

20. Summary of Revenues and Expenses of Steam Roads in the 

United States for July, 1911. 

21. The Cost of Transportation on the Erie Canal and by Rail 



Roads in the 








BUREAU OF 
RAILWAY ECONOMICS 



LOGAN G. MCPHERSON 

DIRECTOR 


FRANK HAIGH DIXON 

CHIEF STATISTICIAN 


Analysis of the Accident Statistics 
of the Interstate Commerce 
Commission for the year 
ending June 30,1911 



BULLETIN No. 23 
WASHINGTON, D. C. 
1911 





BULLETINS OF THE 
BUREAU OF RAILWAY ECONOMICS 

1. Summary of Revenues and Expenses of Steam Roads in the 

United States for July, 1910. (Monthly Report Series, 
Bulletin No. 1.) 

2. Summary of Revenues and Expenses of Steam Roads in the 

United States for August, 1910. (Monthly Report Series, 
Bulletin No. 2.) 

3. Summary of Revenues and Expenses of Steam Roads in the 

United States for September, 1910. (Monthly Report Series, 
Bulletin No, 3.) 

4. A Comparative Statement of Physical Valuation and Capitaliza¬ 

tion. 

5. Preliminary Bulletin for November, 1910—Revenues and Ex¬ 

penses. 

6. Railway Traffic Statistics. 

7. Summary of Revenues and Expenses of Steam Roads in the 

United States for October ,1910. (Monthly Report Series, 
Bulletin No. 4.) 

8. Summary of Revenues and Expenses of Steam Roads in the 

United States for November, 1910. (Monthly Report Series, 
Bulletin No. 5.) 

9. Summary of Revenues and Expenses of Steam Roads in the 

United States for December, 1910. (Monthly Report Series, 
Bulletin No. 6.) 

10. Summary of Revenues and Expenses of Steam Roads in the 

United States for January, 1911. 

11. Comment on the Decision in the Western Advanced Rate Case, 

No. 3500. (Out of Print.) 

12. Summary of Revenues and Expenses of Steam Roads in the 

United States for February, 1911. 

13. Summary of Revenues and Expenses of Steam Roads in the 

United States for March, 1911. 

( Continued .) 


The numbering of the monthly bulletins as a separate series was abandoned 
with the December, 1910 , issue. Since then all bulletins issued by the Bureau 
have been given a consecutive number only. 




Analysis of the Accident Statistics 
of the Interstate Commerce 
Commission for the year 
ending June 30, 1911 


hi 


WASHINGTON, D. C. 
November, 1911 



ANALYSIS OF THE ACCIDENT STATISTICS OF THE INTERSTATE 
COMMERCE COMMISSION FOR THE YEAR 
ENDING JUNE 30, 1911. 

In view of the fact that the press report of railway accidents for the 
year ending June 30, 1911, given out from the offices of the Interstate 
Commerce Commission did not sufficiently analyze the figures to bring 
out their significance and avoid the danger of misunderstanding, a 
further analysis has been made by the Bureau of Railway Economics 
and is herewith submitted. It is to be regretted that these figures 
cannot be related to the number of passengers carried or the number 
of trains, but statistics of traffic for the year ending June 30, 1911, 
will not be available for several months. Particular attention is called 
to the fact that the number of passengers on passenger trains killed 
during the year, for whose deaths the railways were probably responsi¬ 
ble, is only 96. 

At the end of this bulletin there is inserted the portion of the press 
notice of the Interstate Commerce Commission referred to that relates 
to the statistics for the fiscal year 1911. 

Total Statistics ol Accidents. 

Killed. Injured. 

Total casualties . 10,396 150,159 

From this total deduct— 

Killed. Injured. 

Trespassers . 5*284 5,614 

Other persons (not passengers or 


employees). 1,154 5,073 



6,438 

10,687 

Leaving passengers and employees. 

. 3,958 

139,472 

Of which passengers comprise.. 

. 356 

13433 

And employees comprise. 

. 3,602 

126,039 












4 


Total casualties 


Accidents to Passengers. 

Killed. 

.. 356 


Killed. Injured. 

Deduct passengers on freight 

trains. 18 649 

And newsboys, express and mail 

clerks, Pullman employees, etc.. 57 L 39 1 


75 


Leaving as passengers proper on passenger trains.. . 281 

Deduct accidents for which railways are not re¬ 
sponsible, such as passengers coming in contact 
with obstructions, getting on and off cars, being 
run over in yards and on crossings. 185 


Number of passenger accidents on passenger 
trains for which railways were probably re¬ 
sponsible . 9b 


Total casualties 


Accidents to Employees. 


Killed. 

3,602 


Deduct industrial accidents on 

Killed. 

Injured. 

bridges, at stations, shops, etc.. . 

439 

79,237 

Employees not on duty. 

Falling from or getting on or off 
cars or engines in cases where 
railways evidently are not re¬ 

292 

954 

sponsible . 

Being struck or run over by en¬ 

453 

10,799 

gine or car in yards, at crossings 



and elsewhere. 

1,217 

1,911 


Casualties to employees for which railways may 

have been responsible. 1,201 

Total passengers and employees killed for whose 

deaths railways may have been responsible. . . . 1,297 


Injured. 

13433 

2,040 

IL 393 

5,737 

5,656 

Injured. 

126,039 


92,901 


33438 





















5 


It should be noted that many of the casualties resulting from derail¬ 
ment, which are included among those for which railways may have 
been responsible, are due to malicious obstruction of tracks and to 
ne glig ence of trainmen and signalmen. They are not tabulated here 
because the report of the Commission does not separate them into 
those of passengers and employees. The total number of accidents 
from these causes amounts to 52 deaths and 684 injuries. 

It may further be remarked that many of the accidents to em¬ 
ployees, such as those resulting from coupling cars, are due to negli¬ 
gence of the employees themselves, but the statistics do not permit of 
further analysis along this line. It should also be noted that many of 
the injuries are relatively slight, the only requirement in order to get 
them into the statistics being that the employee must be incapacitated 
for work for at least three days in the aggregate during the ten days 
immediately following the accident. For example, the highest single 
class of injuries from coupling cars, 907, results in “contusion or lacer¬ 
ation of fingers.” 


From Press Notice issued by the Interstate Commerce Commission 
concerning railway accidents for the year ending June 30, 1911 : 

“This bulletin closes the first year’s record of accidents under 
the law of May 6, 1910. It shows the total number of casual¬ 
ties for the year ending June 30, 1911, to be 160,555 (10,396 
killed and 150,159 injured). Of this number, 439 killed and 
79,237 injured are classed under the head of “Industrial Acci¬ 
dents,” which do not involve the movement of cars or engines 
on rails. During the year there was a total of 5,287 persons 
killed and 5,614 injured while trespassing on the property of 
the railroad, walking on the tracks or stealing rides on trains. 

“There is a noticeable decrease in the number of passengers 
killed during the year as compared with the previous year, being 
356 against 421. 

“This bulletin gives the total number of employees in the 
service of the railroad companies on June 30, 1911, as 1,648,033. 

“During the year ending June 30, 1911, there was one em¬ 
ployee killed to every 458 employed, and one employee injured 
to every 13 employed.” 













































































































































































• V * ' • ' 





















BULLETINS OF THE 
BUREAU OF RAILWAY ECONOMICS 

( Continued ,) 

14. Summary of Revenues and Expenses of Steam Roads in the 

United States for April, 191.1, 

15. The Conflict Between Federal and State Regulation of the Rail¬ 

ways, 

16. Summary of Revenues and Expenses of Steam Roads in the 

United States for May, 1911, 

17. Railway Wage Increases for the Year Ending June 30, 1911. 
Retrenchment in the Railway Labor Force in 1911, 

18. Capitalization and Dividends of the Railways of Texas, Year 

Ending June 30, 1909. 

19. Summary of Revenues and Expenses of Steam Roads in the 

United States for June, 1911, 

20. Summary of Revenues and Expenses of Steam Roads in the 

United States for July, 1911, 

21. The Cost of Transportation on the Erie Canal and by Rail. 

22. Summary of Revenues and Expenses of Steam Roads in the 

United States for August, 1911, 

23. Analysis of the Accident Statistics of the Interstate Commerce 

Commission for the Year Ending June 30, 1916, 


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BULLETINS OF THE 
BUREAU OF RAILWAY ECONOMICS 


1 . Summary of Revenues and Expenses of Steam Roads in the 

United States for July, 1910 . (Monthly Report Series, 
Bulletin No. 1 .) 

2 . Summary of Revenues and Expenses of Steam Roads in the 

United States for August, 1910 . (Monthly Report Series, 
Bulletin No. 2 .) 

3 . Summary of Revenues and Expenses of Steam Roads in the 

United States for September, 1910 . (Monthly Report 
Series, Bulletin No. 3 .) 

4 . A Comparative Statement of Physical Valuation and Capitali¬ 

zation. 

5 . Preliminary Bulletin for November, 1910 —Revenues and 

Expenses. 

6 . Railway Traffic Statistics. 

7 . Summary of Revenues and Expenses of Steam Roads in the 

United States for October, 1910 . (Monthly Report Series, 
Bulletin No. 4 .) 

8 . Summary of Revenues and Expenses of Steam Roads in the 

United States for November, 1910 . (Monthly Report 
Series, Bulletin No. 5 .) 

9 . Summary of Revenues and Expenses of Steam Roads in the 

United States for December, 1910 . (Monthly Report 
Series, Bulletin No. 6.) 

10 . Surnmar) of Revenues and Expenses of Steam Roads in the 

United States for January, 1911 . 

11 . (Out of Print.) 

1 2 . Summary of Revenues and Expenses of Steam Roads in the 

United States for February, 1911 ., 

13 . Summary of Revenues and Expenses of Steam Roads in the 

United States for March, 1911 . 

(Continued on third page of cover.) 


The numbering of the monthly bulletins as a separate series was abandoned 
with the December, 1910, issue. Since then all bulletins issued by the Bureau 
have been given a consecutive number only. 





Comparative Railway Statistics 


OF 


The United States 
The United Kingd om 
France and 
Germany 
For 1900 and 1909 


A 


WASHINGTON, D. C. 
NOVEMBER, 1911, 





















































































































CONTENTS. 

Q Pag* 1 

nummary . c 

Text— 

Introduction. 15 

I 

Railway Mileage in Proportion to Population and Area. 18 

II. 

Motive Power and Equipment. 21 

III. 

The Utilization of the Railways . 25 

IV. 

Capitalization, Revenues and Expenses.. . 31 

Tables— 

Area of Population. 37 

Mileage. 38 

Equipment. 40 

Traffic. 42 

Capitalization, Revenues and Expenses. 46 




















SUMMARY. 


,J°i ^r reaS0DS stated in the introduction the comparisons in 
! are 111 the mam between the railways of that portion 
of the United States designated by the Interstate Commerce Com¬ 
mission as Group II (comprising approximately the States of New 

ork, Pennsylvania, New Jersey, Delaware and Maryland) and those 
of the United Kingdom; between the railways of Group II and 
those of France; between the railways of Group II and those of 
Prussia-Hesse, wherein are the more important railways of Ger¬ 
many. However, if the comparison be extended to include the entire 
Umted States, it will set forth the contrast between the supply and 
utilization of the railway facilities of the country as a whole and 
the supply and utilization of those of its most densely populated 
section; and as the comparison of the utilization is on a per mile 
of line basis it will not be without significance if extended to indi 
cate the contrast between the United States as a whole and the 
respective countries of Europe. 

The more essential information contained in the text and the 
tables is broadly and roughly summarized in the following para 
graphs. As pointed out there can be no exact and absolute com 
parison. 


Group II and the United Kingdom: 

The areas of Group II and of the United Kingdom are virtually 
of the same extent. 

The density of population of Group II is but half that of the 
United Kingdom. 

In proportion to area Group II has a greater number of miles of 
line, but the miles of track are fractionally less. 

In proportion to population Group II has over twice as manv 
miles of line, and virtually twice as many miles of track. 

The railways of Group II, with number of freight cars per mile of 
line only about two-thirds of that of the United Kingdom, have a 
freight train density about three-fourths as great. The freight 
revenues per mile of line are over one-fourth greater in Group II. 

The railways of Group II, with less than one-sixth as many pas- 


a 


senger cars per mile of line, have a passenger train density about 
two-fifths of that of the United Kingdom; the passenger revenues 
per mile of line are less than half as great. 

The fact that passenger mile and ton mile statistics are not 
recorded for the railways of the United Kingdom prevents a more 
specific comparison of the utilization of its railways. 

The net capitalization per mile of line of the railways of Group 
[I is not available. The capitalization per mile of line of the rail 
ways of the United States is less than one-fourth that of the rail¬ 
ways of the United Kingdom and less than one-fifth that of the 
railways of England and Wales alone. 

Group II and France: 

The area of Group II is but little more than half as large as that 
of France. 

The density of population is virtually the same in Group II and 
in France. 

In proportion to area Group II has one and five-sixths times the 
miles of line of France and over one and four-fifths times the 
miles of track. 

In proportion to population Group II has twice as many miles 
of line and almost twice as many miles of track. 

The railways of Group II, with freight cars per mile of line one 
and two-thirds times as many as those of France, have a freight 
train density over one and one-half times, and a freight density 
nearly four and one-half times as great. The average tons per freight 
train are nearly two and three-fourth times, and the average ton 
miles per inhabitant are over eight times those of France, while 
the freight revenues per mile of line are over two and one-sixth 
times as great. 

The railways of Group II, with less than one-third of the number 
of passenger cars per mile of line, have a passenger train density 
nine-tenths that of France, a little over nine-tenths the number 
of passengers per train, while the passenger density is not quite three 
fourths that of France. The passenger miles per inhabitant are 
one and one-tliird times and the passenger revenues per mile of 
line about one and one-tenth times as great as for France. 

The capitalization per mile of line of the railways of the United 
States is considerably less than half that of the railways of France. 


7 


Group II and Prussia-Hesse: 

The area of Group II is about four-fifths as large as that of 
Prussia-Hesse. 

The density of population of Group II is about three-fifths of that 
of Prussia-Hesse. 

In proportion to area Group II has one and one-third times the 
miles of line and nearly one and one-third times the miles of track. 

In proportion to population Group II has considerably more than 
twice as many miles of line and over twice as many miles of track. 

The railways of Group II, with number of freight cars per mile of 
line exceeding that of Prussia-Hesse by about one-fifth, have a 
freight train density about one-fourteenth greater and a freight 
density over twice as great. The average tons per freight train 
are over twice and the average ton miles per inhabitant nearly 
five times tjiose of Prussia-Hesse, while the freight revenues per 
mile of line are only about one-sixth greater. 

The railways of Group II, with less than one-fourth of the number 
of passenger cars per mile of line, have a passenger train density 
about three-fifths that of Prussia-Hesse, a little over two-thirds the 
average number of passengers per train and a passenger density 
about two-fifths that of Prussia-Hesse. The passenger miles per 
inhabitant are only fractionally less, and the passenger revenues 
per mile of line are about six-sevenths of those of Prussia-Hesse. 

The average capitalization per mile of line for the United States 
is but little more than half that of Prussia-Hesse. 

The United States and Group II: 

The area of the United States is over twenty-seven times as large 
as that of Group II. 

The density of population of the United States is but one-sixth 
that of Group II. 

In proportion to population the United States has a little more 
than twice as many miles of line and over one and one-half times 
as many miles of track. In proportion to area the United States 
has a fraction over one-third the miles of line of Group II and but 
little over one-fourth the miles of track. 

The railways of the United States, with number of freight cars per 
mile of line somewhat over one-third of that of Group II, have 


8 


a freight train density nearly half as great and a freight density 
less than two-fifths as great. The average tons per freight train are 
about three-fourths, the ton miles per inhabitant over four-fifths, 
while the freight revenues per mile of line are less than one-half 
those of Group II. 

The railways of the United States, with less than two-fifths the 
number of passenger cars per mile of line, have a passenger train 
density nearly half as great, nine-tenths the number of passengers 
per train, and a passenger density little more than two-fifths that 
of Group II. The passenger miles per inhabitant are about nine- 
tenths and the passenger revenues per mile of line a fraction less 
than one-half those of Group II. 

This comparison is of the whole United States including Group 
[I, with Group II. 

The United States and the United Kingdom: 

The area of the United States is twenty-four times as large as 
that of the United Kingdom. 

The density of population in the United States is less than one- 
twelfth that of the United Kingdom. 

In proportion to area the United States has a fraction over two 
tifths the miles of line and a fraction over one-fourth the miles of 
track of the United Kingdom. 

In proportion to population the United States has over five times 
the miles of line and nearly three and one-third times the miles of 
track. 

The railways of the United States, with number of freight cars per 
mile of line but a fraction over one-fourth of that of the United 
Kingdom, have a freight train density over one-third as great. The 
freight revenues per mile of line are over one-half as great. 

The railways of the United States, with less than one-sixteenth 
as many passenger cars per mile of line, have a passenger train 
density nearly one-fifth that of the United Kingdom, and passenger 
revenues per mile of line less than one-fourth as great. 

The United States and France: 

The area of the United States is about fourteen times as large 
as that of France. 


9 


The density of population in the United States is about one 
sixth that of France. 

In proportion to area the United States has about two-thirds as 
many miles of line and one-half as many miles of track as France. 

In proportion to population the United States has over four times 
as many miles of line and over three times as many miles of track. 

rhe railways of the United States, with number of freight cars per 
mile of line two-thirds of that of France, with an aggregate 
freight car capacity eight times as great in proportion to popula 
tion, have a freight train density three-fourths as great and a 
freight density one and seven-tenths times as great. The average 
tons per freight train are over twice, and the ton miles per inhabi 
tant seven times those of France, while the freight revenues per 
mile of line are virtually the same. 

The railways of the United States, with over one-ninth of the 
number of passenger cars per mile of line, have a passenger train 
density about two-fifths that of France, about six-sevenths the 
number of passengers per train and a passenger density somewhat 
less than one-third that of France. The passenger miles per inhabi 
tant are about one-fourth greater and the passenger revenues per 
mile of line somewhat over one-half those of France. 

The United States and Prussia-Hesse: 

The area of the United States is over twenty-one times as large 
as that of Prussia-Hesse. 

The density of population of the United States is a fraction over 
one-tenth that of Prussia-Hesse. 

In proportion to area the United States has about one-half as 
many miles of line and about one-third as many miles of track. 

In proportion to population the United States has nearly five 
times as many miles of line and over three times as many miles of 
track. 

The railways of the United States, with number of freight cars per 
mile of line one-half of that of Prussia-Hesse, with an aggre 
gate freight car capacity more than five times as great in proportion 
to population, have a freight train density over one-half and a 
freight density over nine-tenths as great. The average tons per 
freight train are one and one-half times and the average ton miles 


10 


per inhabitant four times those of Prussia-Hesse, while the freight 
revenues per mile of line are only a fraction over half as great. 

The railways of the United States, with slightly over one-twelfth 
of the number of passenger cars per mile of line, have a passenger 
train density less than one-third that of Prussia-Hesse, less than 
two-thirds the average number of passengers per train, while the 
passenger density is a fraction under one-fifth as great. The pas 
senger miles per inhabitant are about eight-ninths and the pas 
senger revenues per mile of line about two-fifths those of Prussia 
Hesse. 

Among the striking points developed by these comparisons on the 
per mile of line basis are the different relations sustained by the 
freight traffic and the passenger traffic of Group II and of the 
United States to the freight traffic and the passenger traffic of the 
other countries. 

With freight train units one and one-half times those of France, 
the railways of Group II move four and one-half times the units of 
freight, but receive freight revenues only two and one-sixth times as 
great. With freight train units but one-fourteenth greater than 
those of Prussia-Hesse the railways of Group II move over twice the 
units of freight, but receive freight revenues only one-sixth greater. 

With freight train units three-fourths of those of France the rail 
ways of the United States move one and seven-tenths times the units 
of freight, while the freight revenues per mile are virtually the same. 
With freight train units a fraction over one-half as great, the 
railways of the United States move nine-tenths the units of freight 
of Prussia-Hesse, while the freight revenues are but a fraction over 
half as great. 

With passenger train units nine-tenths those of France, the rail¬ 
ways of Group II move only three-fourths the number of passenger 
units, but receive passenger revenues one and one-tenth times as 
great. With passenger train units three-fifths of those of Prussia- 
Hesse, the railways of Group II move about two-fifths the number 
of passenger units and receive passenger revenues six-sevenths of 
those of Trussia-Hesse. 

With passenger train units about two-fifths those of France, the 
railways of the United States move somewhat less than one-third of 
the passenger units and receive passenger revenues somewhat over 
one-half as great. With passenger train units less than one-third 


11 


those of Prussia-Hesse, the railways of the United States move a 
fraction under one-fifth of the passenger units, while the passenger 
revenues are about two-fifths those of Prussia-Hesse. 

It is repeated that these comparisons are of the average per 
formance per mile of line and have no relation to the aggregate 
utilization of the railways for any of the countries as a whole. 






FEXT 




























































































































INTRODUCTION. 

As the service of the railways of a country is intimately related to 
the needs of the people of that country, the volume of traffic in lar<w 
measure is determined at any given time by the aggregate of the 
population and its character. As the population may be dispersed 
over an extended region or concentrated in a small area, it is ap 
parent that the extent of the railways and the characteristics of 
their service are related to the distribution of the population. 

The serviceability of railways is to be viewed in the light of both 
supply and demand. 

First, what is the proportion of miles of railway to the population 
and to the area over which that population is distributed; what arf 
the facilities for moving traffic, the number and power of locomo 
tives, the number and capacity of freight cars and of passenger 
cars? 

Second, what use is made of the railways; what is the number of 
tons of freight they haul; what is the average number of ton miles 
handled per mile of line; what are the average ton miles in propor 
tion to the population and in proportion to the area occupied by thai 
population ? What is the number of passengers they haul, what is 
the average number of passenger miles per mile of line, what are the 
passenger miles in proportion to the population and in proportion 
to the area occupied by that population? 

A light is cast upon the economy of railway operation by the 
number of tons of freight hauled per freight train, and the uum 
ber of passengers hauled per passenger train. 

The pecuniary relation of the railways to the country they serve 
is revealed by their capitalization and their revenues. 

The financial status of the railways is shown by the relation that 
their expenses for operation bear to their earnings, and by the rela 
tion of their net earnings to their capitalization. 

As the population of a country increases its traffic increases, and 
therefore, other things equal, its railway facilities should increase. 
A series of comparisons indicating for certain intervals the increase 
in population, the increase in miles of railway and in facilities, the 


16 


increase in freight traffic and in passenger traffic, may indicate 
roughly the growth in the industry and commerce of a country. 
The development of the financial status of the railways will also be 
indicated if this comparison include the changes in capitalization 
per mile and in revenues and expenses per mile. 

In this bulletin an attempt is made to present for the important 
commercial countries the fundamental statistics which reveal the 
railway status, and to demonstrate thereby the comparative serv 
iceability, physical efficiency and financial condition of the rail 
ways of these countries. 

Although their areas are approximately equal, the geographical, 
racial, and political characteristics of the United States and of 
Europe are so different that a comparison of the railway facilities 
md railway service of the total areas would not be enlightening. 
The less advanced sections of the United States are naturally more 
prosperous and are making greater progress than the backward 
regions of Europe. The statistics of the whole United States are not 
fairly comparable with those of any of the more advanced countries 
of Europe because of the great difference in area, in diffusion of 
population, and in general development. That portion of the United 
States comprised in what the Interstate Commerce Commis¬ 
sion designates as Group II, which consists approximately of 
the States of New York, Pennsylvania, New Jersey, Delaware, 
and Maryland, is comparable as to area, population, and in¬ 
dustrial and commercial development with the United Kingdom, 
with France, and with Prussia-Hesse, wherein are the more im¬ 
portant railways of Germany. Therefore in this bulletin Group II 
is compared with each of these countries respectively and a com 
parison is incidentally afforded of each of these countries with the 
other. The comparison is also made to include the entire United 
States in order to show the relation, in the respects referred to, of 
the country as a whole to Group II and to the different foreign 
countries. 

The latest data available for the United Kingdom and for Prus- 
sia-Hesse relate to the year 1909. For France there are no more re¬ 
cent returns than for 1908. These are used in the text in comparison 
with the data of other countries for 1909 in the belief that the re¬ 
sults thereby obtained do not vary more than a negligible degree 


17 


from those that would be secured were the French statistics for 1909 
available. It may be noted, however, that from the detailed tables 

o owing the text may be obtained a comparison for the different 
countries for the year 1908. Because of a change in the practice of 
the Interstate Commerce Commission the figures throughout the 
bulletin that apply to the United States as a whole and to Group IJ 
are based upon returns which for the years 1900 and 1905 include 
those of switching and terminal companies, but for the years 1908 
and 1909 do not include those of switching and terminal companies. 

t must be borne in mind that the industrial and commercial con 
ditions of the United States and of these various countries of 
Europe widely differ, the channels of traffic are of different character, 
tiie volume of traffic is differently constituted and there is difference 
in the methods of keeping accounts. Therefore there can be no exact 
and absolute comparison. However, for such items as have been 
discussed, it is not thought that the variance from exact comparabi) 
ity impairs the essential accuracy of the broad and general deduo 
tions. Where close comparisons are impossible, the fact has beer 
stated. 

The small tables interspersed in the text immediately following 
this introduction are epitomized from the more elaborate tables on 
pages 37 to 47. For a comprehensive statistical comparison 
the reader is referred to these tables. In connection therewith are 
many qualifying references that are not indicated in the epitomized 
tables or the accompanying text. 

The statistics which appear in this bulletin were obtained from 
the annual reports on Statistics of Railways of the Interstate Com 
merce Commission, the annual compilations of the returns of the 
railways of the United Kingdom to the Board of Trade, the annual 
railway reports of the French Minister of Public Works, the volum 
inous abstracts of official railway returns published from time to 
time in the Archiv fur Eisenbahnwesen, and the annual reports of 
the Prussian Minister of Public Works. The unit of weight is the 
short ton of 2,000 pounds. The compilations based upon these sta 
tistics were made by the statistical department of the Bureau of 
Railway Economics. 


18 


I. 

Railway Mileage in Proportion to Population and to Area. 

The expression “density of population’’ indicates the number of 
persons living in a given area. The average density of population of 
any country is ascertained by dividing the total population by the 
total units of area, for each of which the average density is desired. 
The following table shows the density of population per square mile: 


Population per square mile. 

In 1909. 

Compared with 1900. 

Group II 

181.8 persons 

increased 21.4 per cent 

United Kingdom 

370.8 “ 

increased 9.4 

France 

189.6 “ 

decreased .4 

Prussia-Hesse 

297.0 “ 

increased 14.8 

United States 

30.4 “ 

increased 18.9 


In the succeeding tables and text, “mile of line” and “mile of 
track” have the significance that is customary in railway parlance. 
By a “mile of line” is meant the entire roadway for a distance of 
one mile over which trains are operated. Thus a railway over the 
ten miles from A to B, whether it be composed of one, two, or any 
other number of tracks, counts as ten miles of line. 

By a “mile of track” is meant one track for the distance of one 
mile over which trains are operated. Thus if a railway over the 
ten miles from A to B has four tracks for the entire distance, it 
would count as forty miles of track. 

The number of miles of line in a given region indicates how ex 
tensively, and the number of miles of track how intensively, it is 
supplied with railways. 

In the comparisons of “mile of track” only main tracks are used, 
siding and yard tracks being excluded. 


of line. 

In 1909. 

Compared with 

1900. 

Group II 

23,887 

increased 10.0 per cent 

United Kingdom 

23,280 

increased 6.5 

11 

France 

24,931 

increased 5.5 

< t 

Prussia-Hesse 

23,154 

increased 21.2 

t < 

United States 

235,402 

increased 22.3 

11 


19 


Miles of track. 

In 1909. 

Compared with 1900. 

Group II 

33,558 

increased 15.4 per cent 

United Kingdom 

39,622 

increased 10.7 “ 

France" 

35,650 

increased 5.9 “ 

Prussia-Hesse 

33,133 

increased 23.1 “ 

United States 

259,975 

increased 25.8 “ 

a First and second tracks. 



Miles of line per 10,000 inhabitants. 

In 1909. 

Compared with 1900. 

Group II 

12.18 

decreased 9. Ip per cent 

United Kingdom 

5.17 

decreased 2.6 per cent 

France 

6.35 

increased 4.4 “ 

Prussia-Hesse 

5.67 

increased 5.6 ‘ k 

United States 

26.05 

increased 2.8 “ 

Miles of track per 10,000 inhabitants. 

In 1909. 

Compared with 1900. 

Group II 

17.11 

decreased Ip.9 per cent 

United Kingdom 

8.80 

increased 1.1 “ 

France 

9.08 

increased 5.0 “ 

Prussia-Hesse 

8.11 

increased 7.3 “ 

United States 

28.77 

increased 5.8 “ 

Miles of line per 100 square miles. 

In 1909. 

Compared with 1900. 

Group II 

22.14 

increased 10.0 per cent 

United Kingdom 

19.18 

increased 6.5 “ 

France 

12.04 

increased 4.1 “ 

Prussia-Hesse 

16.83 

increased 21.2 “ 

United States 

7.93 

increased 22.3 “ 

Miles of track per 100 square miles. 

In 1909. 

Compared with 1900. 

Group II 

31.11 

increased 15.4 per cent 

United Kingdom 

32.65 

increased 10.7 “ 

France 

17.22 

increased 4.6 “ 

Prussia-Hesse 

24.08 

increased 23.1 “ 

United States 

8.75 

increased 25.8 “ 



20 


Per cent of line having two or more 
tracks. 


In 1909. Compared with 1900. 


Group II 
United Kingdom 
France 

Prussia-Hesse 
United States 


31.2 per cent 27.0 per cent 


55.8 “ 55.6 

43.0 “ 42.3 

42.3 “ 40.5 

8.9 “ 6.3 


That one country has a greater or less number of miles of line or 
of track than another in proportion to population or to area cannot 
alone be taken as a criterion of the relative adequacy of the supply 
of railway facilities. In the aggregate of such facilities, number 
and power of locomotives and number and capacity of cars are 
factors of no less importance than miles of track. The demand for 
transportation, and the efficiency with which railway facilities are 
utilized in meeting that demand, must also be considered in de 
termining the adequacy of transportation service. It should be 
noted that while a greater ratio of railway mileage to population or 
to area ordinarily indicates greater responsiveness to transporta 
tion demands, it may not inconceivably signify a redundant and 
excessive supply of mileage. 


21 


II. 

Motive Power and Equipment. 

While both locomotives and cars are frequently considered to con 
stitute the equipment of a railway there is a growing practice te 
designate the locomotives as motive power, and the cars as equip 
ment. H y 


In 1909. Compared with 1900. 

561 increased 24.9 per cent 
980 increased 1.0 “ 

480 increased 8.4 “ 

838 increased 24.3 “ 

243 increased 24.6 “ 

Tractive power, not number of locomotives, furnishes adequate 
data for comparison of motive power facility. It is obvious that a 
locomotive that can draw one thousand tons ought not to count the 
same in a comparison with the locomotive that can draw but five 
hundred tons. Unfortunately, however, the average tractive power 
per locomotive or the aggregate tractive power of all locomotives is 
not ascertainable except for the United States. As the average 
freight train load of Group II is over twice as great as that of 
Prussia-Hesse, it is conservative to estimate that the five hundred 
and sixty-one locomotives per 1,000 miles of line of Group II are 
capable of greater service than the eight hundred and thirty-eight 
of Prussia-Hesse, and that the increase of 24.9 per cent in the 
number of locomotives in Group II, and of 24.6 per cent in the United 
States as a whole, represents an increase in motive power capacity 
considerably greater than the increase of 24.3 per cent in the number 
of locomotives in Prussia-Hesse. The conservatism of this estimate 
is supported by the respective average capacity of freight cars and 
average number of tons per freight train, given in following para 
graphs. 


Locomotives per 1,000 miles of line. 

Group II 
United Kingdom 
France 

Prussia-Hesse 
United States 



22 


Cars of all kinds per 1,000 mile of 
line. 

Group II 
United Kingdom 
France 

Prussia-Hesse 
United States 


In 1909. 

Compared with 

1900. 

22,388 

increased 17.4 per cent 

36,060 

increased .9 

i i 

14,704 

increased 10.2 

t i 

19,607 

increased 19.1 

‘ ‘ 

9,423 

increased 25.1 

t < 


In Group II, the increase in miles of line for 1909 over 1900 was 
10 per cent. The ratio of increase in number of cars was three 
fourths greater than the increase in miles of line. 

In the United Kingdom the increase in miles of line was 0.5 per 
cent. The ratio of increase in the number of cars was one-seventh 
as great. 

In France the miles of line increased 5.5 per cent between 1900 and 
L908. The ratio of increase in the number of cars was nearly twice 
as great. 

In Prussia-Hesse the increase in miles of line between 1900 and 
L909 was 21.2 per cent. The ratio of increase in the number of 
cars was nine-tenths as great. 

In the United States as a whole the miles of line increased 22.3 
per cent and the number of cars in a greater ratio by one-tenth. 


Passenger and freight cars per 1,000 
miles of line in 1909. 

Passenger Cars. 

Freight Cars. 

Group II 

375 

21,128 

United Kingdom 

2,270 

32,020 

France 

1,159 

*12,811 

Prussia-Hesse 

1,609 

*17,530 

United States 

136 

8,809 


The average seating capacity of passenger cars for Group II, for 
the United Kingdom, for France, and for the United States is not 
ascertainable. The average for the passenger cars of the Pennsyl 
rania Railroad in 1909 was 63, and for Prussia-Hesse 49. The 
average seating capacity for Group II is perhaps slightly lower than 
for the Pennsylvania Railroad, and that for the United States as a 
whole still lower. It is safe to estimate that the average seating 


Including cars in company’s service. 




23 


capacity of the passenger cars of the United 
is lower than for the United States. 


Kingdom and of France 


The average capacity of the freight cars of Prance in 1908 was 13 

r? DS .’ °H b0Se ° f PrussiaH esse in 1909 > 16.5 tons, and of those of the 
mted States 35 tons. There are very few, if any, freight cars in 
England as large as those of the United States, the freight of that 
country being carried in “waggons” or “trucks” holding from 4 to 8 
tons each. The measure of the total freight car capacity of the re 
spective countries is afforded by the following table: 


Total number and aggre- Total number 


gate capacity of freight of freight 
cars in 1909. cars . 

United States 2,071,338 

United Kingdom 745,348 

France *319,788 

Prussia-Hesse *405,900 


Aggregate ca- Freight car 
pacity of capacity 
freight cars, per 10,000 

tons. inhabitants. 

73,137,546 8,093 

(Data not available) 
4,159,565 1,059 

6,280,260 1,537 


b or each inhabitant the United States provides seven and one 
half times as much freight car capacity as France, and nearly five 
and one-half times as much as Prussia-Hesse. 

It is true, however, that the canals and rivers are a larger factor 
in the conveyance of freight in both France and Germany than they 
are in the United States. Such waterways carry about one-seventh 
of the total interior freight of Germany and about one-ninth of 
that of France. Therefore, the aggregate capacity of the 
interior watercraft should be considered in arriving at the aggre 
gate capacity of the freight vehicles of these countries. The ca 
pacity of the inland waterway craft in France in 1907 was 4,234,794 
tons which, added to the capacity of the freight cars, gives an aggre 
gate capacity of 8,394,359 tons, or 2,138 tons per 10,000 inhabitants. 
The capacity of the inland waterway craft of Germany in 1907 was 
6,900,000 tons. This added to the freight car capacity of Prussia 
Hesse gives an aggregate freight capacity of 13,180,260 tons or 3,226 
tons per 10,000 inhabitants. Therefore, it will be perceived that the 
freight car capacity per inhabitant of the United States is over 


♦Including cars in company’s service. 



24 


three and three-fourths times as great as the combined capacity per 
inhabitant of the freight cars and boats of France, and over two 
and one-half times as great as the combined capacity per inhabitant 
of the freight cars and boats of Prussia-Hesse. The aggregate freight 
car capacity of the United Kingdom is not ascertainable. 

The development in power of locomotives and capacity of freight 
cars in the United States is due to the great volume of long haul 
traffic. 


25 


III. 

The Utilization of the Railways. 

Up to this point comparisons of the serviceability of railways 
have been based upon their facilities. Further light is thrown upon 
that serviceability by the extent to which these facilities are utilized 
If railways readily move all of the traffic offered to them the statis¬ 
tics of utilization measure both the extent of the service and the 
demand for that service. It is widely known that there have been 
periods in the United States during the past decade when the rail¬ 
ways were badly congested, when their facilities were not equal to 
the immediate demand. However, there is no data to show that 
ail of the traffic offered was not moved sooner or later, and there is 
no means of ascertaining with approximate accuracy whether such 
a condition has existed in other countries. Therefore, the following 
comparisons measure the extent or rather the degree of intensity to 
which the railways have been utilized, and in the absence of quali 

ying information may be accepted as a measure of the demand upon 
them. ^ 

The performance of a railway is measured by several units. One 
of these is 

The train mile. This is constituted of the run of one train for 
the distance of one mile. The total number of miles run by one 
train counts as the total train miles for that train. The aggregate 
of the train miles of all trains for a given period constitutes the 
total number of train miles for that period. If on a railway fifty 
miles long, ten trains were run each day for the entire length there 
would be five hundred train miles a day, or for the three hundred 
working days of the year a total of one hundred and fifty thousand 
train miles. If on a railway one hundred miles long five trains were 
run each day for the entire length, there would be five hundred train 
miles a day, or for the three hundred working days of the year a 
total of one hundred and fifty thousand train miles. As the aggre¬ 
gate train miles in these two illustrations are the same for the rail 
way fifty miles long and for the railway one hundred miles long, it 
is obvious that the intensity of train performance cannot be gauged 
simply by train miles. If the total train miles be divided by the 
number of miles of line, the quotient indicates the average number 


26 


of train miles run over each mile of road. In the case of the fifty 
mile road the train miles per mile of line would be three thousand; 
in the case of the road one hundred miles long the train miles per 
mile of line would be fifteen hundred. An equivalent expression for 
train miles per mile of line is train density. 

Every railway carries more or less freight for its own use and 
therefore without pay, and in some countries both freight and pas¬ 
sengers are occasionally carried free on governmental or other ac¬ 
count. As such gratuitous service does not increase the monetary 
receipts, it is ordinarily omitted from such statements as appear in 
this bulletin. Therefore, the term “revenue train miles per mile of 
line” indicates the train density of trains that have added to the 
earnings. 

The following tables show the density for all trains and for 
freight trains and passenger trains separately: 


Revenue train miles per mile of line. 

Group II 
United Kingdom 
France 
Prussia-Hesse 
United States 

Freight train miles per mile of line. 

Group II 
United Kingdom 
France 

Prussia-Hesse 
United States 

Passenger train miles per mile of 
line. 

Group II 
United Kingdom 
France 

Prussia-Hesse 
United States 


In 1909. 

Compared with 

1900. 

9,715 

(Data not available) 

18,009 

decreased 

2.1 per cent 

9,317 

increased 

2.2 

t < 

12,164 

increased 19.7 

11 

4,726 

increased 

2.6 

11 

In 1909. 

Compared with 

1900. 

4,930 

decreased 

5.8 per cent 

6,607 

decreased 

19.8 

< < 

3,203 

decreased 

8.8 

< i 

4,594 

increased 

2.7 

t * 

2,417 

decreased 

5.5 

^ 1 


In 1909. 

Compared with 

1900. 

4,642 

increased 11.2 per cent 

11,332 

increased 12.6 


5,129 

increased 6.9 

< < 

7,570 

increased 64.5 

< < 

2,150 

increased 14.3 

i < 


27 


i o difference how long a train may be or how many passengers or 
tons of freight it may carry, it counts a train mile for every mile it 
runs. Therefore, a decrease in the number of train miles does not 
necessarily indicate a decrease in traffic. It may indicate that a 
greater quantity of traffic is being carried per train, and therefore 
hat the performance from the standpoint of the railway is more 
economical. Of late years the railways in many countries have 
given especial attention to attaining heavier loads per train. 

Therefore from the viewpoint of economical operation, the serv 
iceability of a railway or of the railways of a country is to be judged 
by the Revenue Train Miles per Mile of Line taken in connection 
with certain other units. One of these is 

Ton Miles per Mile of Line. This expression is analogous to train 
miles per mile of line. Each ton carried one mile counts as a ton 
mile. The total number of ton miles carried for a year constitutes 
the aggregate ton mileage for that year. This aggregate ton mileage 
divided by the miles of line gives the ton miles per mile of line, or 
the density of freight traffic. 


Ton miles per mile of line. 

Group II 
France 
Prussia-Hesse 
United States 


In 1909. 

2,451,841 

565,158 

1,069,743 

953,986 


Compared with 1900. 

increased 29.0 per cent 
increased 18.0 “ 

increased 20.3 “ 

increased 29.7 “ 


In Group II the density of freight traffic was nearly four and one 
half times as great as in France, and over twice as great as in Prus 
sia-Hesse. The fact that in Group II the increase of 29 per cent in 
the density of freight traffic was accompanied by a decrease of 5.3 
per cent in the number of freight train miles per mile of line, and 
that the increase in freight density in France of 18 per cent was 
accompanied by a decrease of 3.8 per cent in freight train miles per 
mile of line indicates a greater intensive use of motive power and 
equipment in each of these countries, that is, other things equal, a 
greater economy in operation. 

Another measure of this intensive utilization of motive power and 
equipment is shown by the 


28 


Average tons per freight train. 

Group II 
France 

Prussia-Hesse 
United States 


In 1909. 

Compared with 1900. 

479 

increased 34.9 per cent 

177 

increased 22.9 “ 

233 

increased 42.9 

363 

increased 34.0 


The success of the efforts to economize in operation through heavier 
loading is indicated by the great increase in the average train load 
secured in each country. It is significant that this average train 
load in Group II is nearly two and three-fourths times as great as 
in France and over twice as great as in Prussia-Hesse. The more 
powerful locomotives and larger freight cars of the United States 
are a great factor in this efficiency. 

It will be perceived that in each country which shows a decrease 


in the freight train miles per mile of line the decrease has been accom¬ 
panied by an increase in the average tons per freight train and the 


average ton miles per mile of line; 

that is, in each of these countries 

a greater freight traffic has been moved with fewer freight trains. 

An index to the volume of commerce in proportion to population is 

afforded by the 



Average ton miles per inhabitant. 

In 1909. 

Compared with 1900. 

Group II 

2,950 

increased 15.5 per cent 

France 

359 

increased 22.9 

Prussia-Hesse 

606 

increased 24.7 

United States 

2,421 

increased 30.0 


For each inhabitant of Group II over eight times as many tons of 
freight are moved by rail as for each inhabitant of France and 
nearly five times as many as for each inhabitant of Prussia-Hesse. 

The railways of the United States as a whole carry for each in 
habitant nearly seven times as many ton miles as are carried for each 
inhabitant of France by its railways, and four times as many as are 
carried for each inhabitant of Prussia-Hesse. This is all the more 
remarkable when it is reflected that the density of population in 
the United States is less than one-sixth of that in France and only 
about one-tenth of that in Prussia-Hesse. 

A comparison of the passenger traffic may be made in the same 


29 


manner as that of the freight, that is, with the 


use of analogous 


Passenger miles per mile of line. 

Group II 
France 

Prussia-Hesse 
United States 


In 1909. Compared with 1900. 

290,023 increased 42.9 per cent 
398,984 increased 8.1 “ 

675,023 (Data not available) 
127,299 increased 52.8 per cent 


“ Wi '! beperCeived *** ta Group II and in the United States as a 
° e the increase in the passenger miles per mile of line was 
greater than the increase in the passenger train miles per mile of 
line. In France the increase in passenger density was slightly 
greater than the increase in passenger train density. 

An explanation of the lower density of passenger traffic in Group 
II than in Prance or Prussia-Hesse is found in the fact that in pro 
portion to population Group II has twice as many miles of line as 
ranee, and considerably more than twice as many miles of line as 
Prussia-Hesse. The significance of this is made manifest by a com 
panson of the 


Passenger miles per inhabitant. 

Group II 
France 
Prussia-Hesse 
United States 


In 1909. 

Compared with 1900. 

347.5 

increased 27.4 per cent 

253.7 

increased 13.0 “ 

366.7 

increased 49.8 “ 

322.1 

increased 52.7 “ 


The ratio is greater for Group II and for the United States than 
for France, and is only fractionally less for Group II than for 
Prussia-Hesse. In consideration of the greater ratio of passenger 
miles per inhabitant in Prussia-Hesse, there must not be overlooked 
the fact that the component parts of the great army of Germany 
are in frequent movement from one garrison to another and to and 
from the often recurring reviews and maneuvers. Moreover, the 
passenger traffic of the countries of Europe is constituted in no 
small measure by tourists from other countries, particularly from 
the United States, the passenger miles of this tourist traffic swell¬ 
ing the aggregate which is credited to the inhabitants of the re¬ 
spective countries. 


30 


That the number of passengers carried per train increases more 
rapidly in the United States than in either France or Prussia Hesse 
is shown by a tabulation of the 


Average Passengers per train. 

Group II 
France 

Prussia-Hesse 
United States 


In 1909. 

Compared with 

1900. 

60 

increased 27.7 per cent 

65 

increased 1.6 

i 4 

85 

increased 6.3 

( C 

54 

increased 31.7 

4 4 


The inability to take account of the ton mile and the passenger 
mile traffic of the United Kingdom is regretted. Such statistics are 
not compiled by any of the railways of Great Britain except that the 
North Eastern Railway of England compiles freight statistics. 


31 


IV. 

Capitalization, Revenues and Expenses. 


Ihe capitalization of the railways of the United States is the net 
capitalization per mile reported by the Interstate Commerce Com 
mission. In arriving at this amount, the stocks and securities of 
one railway corporation that are held by another are excluded be 
cause the stocks and securities so held are ordinarily covered by the 
capital issues of the holding company. This net capitalization is not 
ascertainable for Group II. There is probably little or no such dupli 
cation in the capital issues of the railways of foreign countries. 

In 1909. Compared with 1900. 

$59,259 (Data not available) 
274,766 increased 4.9 per cent 
141,301 increased 5.8 “ 

110,727 increased 12.9 “ 

It is noteworthy that the capitalization per mile of the railways 
of the United States is but little more than half that of the 
railways of Prussia-Hesse, considerably less than half that of the 
railways of France, and less than one-fourth that of the railways of 
the United Kingdom. The capitalization of the railways of Eng 
land and Wales alone for 1909 was $328,761 per mile, over five 
times as great as that of the United States. In view of these figures 
it becomes clear, as stated by General Henry S. Haines, that the 
burden of proof that the railway system of the United States is not 
overcapitalized does not rest upon the railway corporations. 


Operating revenues per mile of line. 

In 1909. 

Compared with 1900. 

Group II 

$22,021 

increased 33.3 per cent 

United Kingdom 

23,135 

increased 5.1 “ 

France 

13,406 

increased 8.4 “ 

Prussia-Hesse 

21,056 

increased 20.7 “ 

United States 

10,356 

increased 34.1 “ 

These operating revenues for the different countries are not ex¬ 
actly comparable because they are not in all respects similarly con 


Capitalization per mile of line. 

United States 
United Kingdom 
France 

Prussia-Hesse 


32 


stituted. In Prussia-Hesse, for example, certain receipts are in 
eluded in revenues from operation that in the United States would 
be classified as “other income.” These amount, however, to less than 
three per cent of the total. However, the relative significance of 
these revenues cannot be fully appreciated without taking into ac 
count the volume of traffic. This factor is included in the comment 


upon the immediately succeeding 

tables. 



Freight revenue per mile of line. 

In 1909. 

Compared with 

1900. 

Group II 

$15,693 

increased 32.4 per cent 

United Kingdom 

12,433 

increased 4.4 

< < 

France 

7,196 

increased 8.2 

C ( 

Prussia-Hesse 

13,580 

increased 17.1 

( t 

United States 

7,184 

increased 31.4 

{« 


For Group II the freight revenues per mile of line are about 25 
per cent greater than for the United Kingdom. 

For Group II the freight revenues per mile of line are over twice 
as great as for France. However, as already noted, the ton miles 
per mile of line are nearly four and one-half times as great, and the 
ton miles in proportion to population are over eight times as great. 

For Group II the freight revenues per mile of line are one-sixth 
greater than for Prussia-Hesse. However, the ton miles per mile 
of line are over twice as great and the ton miles in proportion to 
population nearly five times as great. 

These comparisons would indicate that the average receipts per 
ton mile are lower in the United States than in either France or 
Prussia Hesse, and this we find to be the case. For Group II the 
average receipts per ton per mile are .65 cents, that is, six and five 
tenths mills; for France they are 1.21 cents, and for Prussia-Hesse 
1.24 cents. The average receipts per ton mile for the one railway of 
England that compiles such statistics are 2.30 cents, but this in 
eludes collection and delivery of certain high class traffic. Because 
of the varying transportation conditions in the countries com¬ 
pared, the average receipts per ton mile must not be accepted as an 
absolute proof of the relative height of freight rates in Europe and 
the United States. 

A similar analysis of the passenger traffic and the passenger 
revenues shows a different condition. 


33 


In 1909. Compared with 1900. 

$4,884 increased 34.2 per cent 
10,704 increased 5.9 “ 

4,418 increased 4.1 “ 

5,741 increased 24.3 “ 

2,395 increased 42.5 “ 

For Group II the passenger revenues per mile of line are less than 
half of those of the United Kingdom. It should be noted, however, 
that, the English returns of passenger revenues cover all passenger 
train traffic, and include receipts from baggage, mail, and the like. 

For Group II the passenger revenues are about ten per cent 
greater per mile of line than for France. The passenger miles per 
mile of line are over one-third greater in France, while the passenger 
miles per inhabitant are only about two-thirds of those of Group II 

For Group II the passenger revenues per mile of line are about 
six-sevenths of those of Prussia-Hesse. The passenger miles per mile 
of line are less than one-half those of Prussia-Hesse and the pas 
senger miles are about five per cent less per inhabitant. 

The average receipts per passenger mile in Group II are 1.7 cents, 
in France 1.11 cents, and in Prussia-Hesse .94 cents, in the United 
States as a whole 1.93 cents. 


Passenger revenues per mile of line. 

Group II 
United Kingdom 
France 
Prussia-Hesse 
United States 


Operating expenses per mile of line. 

Group II 
United Kingdom 
France 

Prussia-Hesse 
United States 


In 1909. 

Compared with 1900. 

$14,674 

increased 38.0 per cent 

14,833 

increased 7.9 “ 

7,765 

increased 15.6 “ 

14,527 

increased 40.1 “ 

6,851 

increased 37.2 “ 


These operating expenses for the different countries are not ex 
actly comparable because they are not in all respects similarly con 
stituted. For example, in Prussia-Hesse rentals and certain ^other 
items are included in operating expenses that in the United States 
are charged to other accounts. 

Although in the United Kingdom there were nearly twice as many 
train miles per mile of line as in Group II, the operating expenses 
per mile of line for Group II are only fractionally less. 


34 


Although the train miles per mile of line in France are virtually 
the same as in Group II, the operating expenses for Group II per 
mile of line are nearly twice as great. 

The operating expenses per mile of line for Group II are sub 
stantially the same as for Prussia-Hesse, although the train miles 
per mile of line are a fifth less. 


Net operating revenue per mile of 
line. 

Group II 
United Kingdom 
France 

Prussia-Hesse 
United States 


In 1909. 

Compared with 1900. 

$7,347 

increased 25.0 per cent 

8,302 

increased .4 

5,641 

decreased .1 

6,529 

decreased 7.6 

3,505 

increased 28.4 


As the operating revenues and the operating expenses are not 
exactly comparable, it follows that the net operating revenues can 
not be closely compared. The results in one country for one year are 
of course comparable with the results in the same country for an¬ 
other year. 

In Group II the increase has been 25.0 per cent, while the ton 
miles per mile of line have increased 29 per cent and the passenger 
miles per mile of line 42.9 per cent. 

In France there has been a decrease of one-tenth of one per cent 
in net revenue per mile, while the ton miles per mile of line have 
increased 18.0 per cent, and the passenger miles per mile of line 8.1 
per cent. 

In Prussia-Hesse there has been a decrease of 7.6 per cent in net 
revenue per mile, while the ton miles have increased 20.3 per cent. 


TABLES 





TABULAR COMPARISON OF RAILWAY STATISTICS 

The United States, The United States-Qroup II, The United Kingdom, France, Prussia-Hesset 




37 


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38 


TABULAR COMPARISON OF RAILWAY STATISTICS 

(continued) 


Miles of line operated at end 
of fiscal year, single track— 

United States, Group II. 21 

Per cent increase over 1900 

United Kingdom. 21 

Per cent increase ovei 1900 

France. 23 

Per cent increase over 1900 

Prussia-Hesse. 19 

Per cent increase over 1900 


United States, All groups.... 192 
Per cent increase over 1900 


Total miles of track—all main 
tracks— 

United States, Group II. 29 

Per cent increase over 1900 

United Kingdom . a 35 

Per cent increase over 1900 

France. 33 

Per cent increase over 1900 

Prussia-Hesse. 26 

Per cent increase over 1900 
United States, All groups... 206 
Per cent increase over 1900 

a Partially estimated. 


Per cent of line having two or 
more tracks— 

United States, Group II. 

United Kingdom . 

France. 

Prussia-Hesse. 

United States, All groups ... 


1900 

1905 

1908 

1909 

,717 

23,281 

7.2 

23,697 

9.1 

23,887 

10.0 

,855 

22,847 
4- 5 

23,205 

6.2 

23,280 

6.5 

,639 

24,597 

24,931 

5.5 


,102 

21,629 
IS.2 

22,657 

18.6 

23,154 

21.2 

,556 

216,974 

12.7 

230,494 

19.7 

235,402 
22. S 


,084 

32,119 

10. It 

33,222 

1£.2 

33,558 
15. If 

,804 

38,431 

7.S 

39,316 

9.8 

39,622 

10.7 

,650 

35,047 

4-2 

35,650 

5.9 


,911 

30,132 

12.0 

32,316 

20.1 

33,133 

23.1 

,631 

236,855 

U.6 

254,193 
23.0 

259,975 

25.8 


27.0 

29.4 

30.9 

31. 

2 

55.6 

55.6 

55.7 

55. 

.8 

42.3 

42.5 

43.0 ... 



40.5 

38.6 

41.8 

42. 

.3 

6.3 

7.9 

8.8 

8, 

.9 



















39 


TABULAR COMPARISON OF RAILWAY STATISTICS 

(continued) 


Total miles of line per 100 
square miles— 

United States, Group II. 

Per cent increase over 1900 

United Kingdom . 

Per cent increase over 1900 

France. 

Per cent increase over 1900 

Prussia-Hesse. 

Per cent increase over 1900 
United States, All groups... 
Per cent increase over 1900 

Total miles of track per 100 
square miles— 

United States, Group II. 

Per cent increase over 1900 

United Kingdom . 

Per cent increase over 1900 

France. 

Per cent increase over 1900 

Prussia-Hesse. 

Per cent increase over 1900 
United States, All groups ... 
Per cent increase over 1900 
a Partially estimated. 

Population per square mile— 

United States, Group II. 

Per cent increase over 1900 

United Kingdom. 

Per cent increase over 1900 

France. 

Per cent increase over 1900 

Prussia-Hesse. 

Per cent increase over 1900 
United States, All groups ... 
Per cent increase over 1900 


1900 

1905 

1908 

1909 

20.13 

21.58 

7.2 

21.97 

9.1 

22.14 

10.0 

18.01 

18.82 

A.5 

19.12 

6.2 

19.18 

6.5 

11.57 

12.04 

4.7 

12.04 .. 
4.7 .. 


13.89 

15.72 

18.2 

16.47 

18.6 

16.83 

21.2 

6.48 

7.30 

12.7 

7.76 

19.7 

7.93 

22.8 


26. 

96 

29.77 

30.80 

31.11 



10. 4 

Ilf.2 

15. If. 

! 29. 

.50 

31.66 

32.39 

32.65 



7.8 

9.8 

10.7 

16. 

47 

17.15 

17.22 .. 



19.56 

21.90 

23.49 

24.08 


12.0 

20.1 

28.1 

6.96 

7.97 

8.56 

8.75 


Ilf.6 

28.0 

25.8 


149.8 

167.6 

178.3 

181.8 


11.9 

19.0 

21.If 

339.1 

356.1 

367.0 

370.8 


5.0 

8.2 

9.If 

190.4 

192.0 

189.6 .. 



.8 

*•4 •• 


258.8 

279.9 

292.7 

297.0 


8.2 

18.1 

Ilf.8 

25.6 

28.3 

29.9 

30.4 


10.5 

16.8 

18.9 


^Decrease. 





















40 


TABULAR COMPARISON OF RAILWAY STATISTICS 

(continued) 



1900 

1905 

1908 

1909 

Miles of line per 10,000 
inhabitants — 

United States, Group II. 

13.44 

12.88 

12.32 

12.18 

Per cent increase over 1900 


*1^.2 

*8.8 

* 9.4 

United Kingdom . 

5.31 

5.29 

5.21 

5.17 

Per cent increase over 1900 


*4 

*1.9 

*2.6 

France. 

6.08 

6.27 

6.35 .. 


Per cent increase over 1900 


8.1 

4-4 .. 


Prussia-Hesse. 

5.37 

5.62 

5.63 

5.67 

Per cent increase over 1900 


4.7 

4.5 

5.6 

United States, All groups ... 

25.34 

25.84 

25.96 

26.05 

Per cent increase over 1900 


2.0 

2. 4 

2.8 

Total miles of track per 10,000 
inhabitants— 

United States, Group II . 

18.00 

17.77 

17.28 

17.11 

Per cent increase over 1900 


* 1.8 

*u.o 

*4 .9 

United Kingdom . 

"8.70 

8.89 

8.83 

8.80 

Per cent increase over 1900 


2.2 

1.5 

1.1 

France . 

8.65 

8.93 

9.08 .. 


Per cent increase over 1900 


8.2 

5.0 .. 


Prussia-Hesse . 

7.56 

7.83 

8.03 

8.11 

Per cent increase over 1900 


3.6 

6.2 

7.3 

United States, All groups... 

27.19 

28.20 

28.63 

28.77 

Per cent increase over 1900 


3.7 

5.3 

5.8 

a Partially estimated. 

Locomotives per 1,000 miles 
of line— 

United States, Group II . 

449 

507 

563 

561 

Per cent increase over 1900 


12.9 

25. 4 

2 If.. 9 

United Kingdom . 

970 

980 

980 

980 

Per cent increase over 1900 


1.0 

1.0 

1.0 

F ranee. 

443 

452 

480 .. 


Per cent increase over 1900 


2.0 

5.4 •• 


Prussia-Hesse. 

674 

711 

“816 

“838 

Per cent increase over 1900 


5.5 

21.1 

2 If.. 3 

United States, All groups... 

195 

223 

246 

243 

Per cent increase over 1900 


74-4 

26.2 

21f..6 


a Includes an appreciable number of motor wagons (Triebwagen). 


^Decrease. 























41 


TABULAR COMPARISON OF RAILWAY STATISTICS 


(continued) 


ars (ail kinds) per 1,000 miles 
of line— 

1900 

1905 

1908 

1909 

United States, Group II. 

Per cent increase over 1900 

19,077 

20,098 
5.U 

23,028 

20.7 

22,388 
17.If 

United Kingdom . 

Per cent increase over 1900 

35,740 

35,750 

a 

36,190 

1.3 

36,060 

.9 

F ranee. 

Per cent increase over 1900 

13,347 

13,595 

1.9 

14,704 . 
10.2 . 


Prussia-Hesse. 

Per cent increase over 1900 

16,458 

16,687 

Plf 

19,332 

17.5 

19,607 

19.1 

United States, All groups... 7,535 
Per cent increase over 1900 
a Less than one-tenth of one per cent. 

8,494 

12.7 

9,680 

28.5 

9,423 

25.1 


Average capacity of freight car 

(tons)— 

United States, Group II. 

Per cent increase over 1900 
United Kingdom . 


Per cent increase over 1900 


France . 

11.2 

12.2 

13.0 .. 


Per cent increase over 1900 


8.9 

16.1 .. 


Prussia-Hesse. 

14.1 

14.7 

15.3 

15.5 

Per cent increase over 1900 


If.3 

8.5 

9.9 

United States, All groups. 


31.0 

35.0 

35.0 

Per cent increase over 1905 



12.9 

12.9 

Average seating capacity of 





passenger car— 





United States, Group II a ... 

57 

59 

62 

63 

Per cent increase over 1900 

United Kingdom . 

Per cent increase over 1900 
France. 


3.5 

8.8 

10.5 





Per cent increase over 1900 
Prussia-Hesse. 

46 

48 

49 

49 

Per cent increase over 1900 
United States, All groups. 


If.3 

6.5 

6.5 


Per cent increase over 1900 

a Pennsylvania Railroad only. 
























42 


TABULAR COMPARISON OF RAILWAY STATISTICS 

(continued) 


Revenue train miles per mile 
of line— 

1900 

1905 

1908 

1909 

United States, Group II. 

Per cent increase over 1908 



10,217 

9,715 
* 1,. 9 

United Kingdom. 

18,397 

17,548 

18,237 

18,009 

Per cent increase over 1900 


* 4.6 

*.9 

*2.1 

Franco 

9,112 

GO 

tot Ci 

tot to 

9,317 


Per cent increase over 1900 

2.2 


Prussia-Hesse. 

10,166 

11,724 

12,489 

12,164 

Per cent increase over 1900 


15.3 

22.9 

19.7 

United States, All groups ... 

4,605 

4,786 

4,899 

4,726 

Per cent increase over 1900 


3.9 

6.1, 

2.6 


Ton miles per mile of line¬ 


United States, Group II. 

1,900,578 

2,200,372 2. 

,565,154 2 

,451,841 

Per cent increase over 1900 


15.8 

35.0 

29.0 

United Kingdom® . 


739,466 

808,857 

814,713 

Per cent increase over 1905 



9.1, 

10.2 

France. 

478,920 

491,955 

565,158 


Per cent increase over 1900 


2.7 

18.0 


Prussia-Hesse. 

889,441 

988,157 1 

,028,503 1 

,069,743 

Per cent increase over 1900 


11.1 

15.6 

20.3 

United States, All groups... 

735,352 

861,396 

974,654 

953,986 

Per cent increase over 1900 


17.1 

32.5 

29.7 

a North Eastern Railway only. 





Average tons per freight train— 





United States, Group H a ... 

355 

412 

464 

479 

Per cent increase over 1900 


16.1 

30.7 

31,.9 

United Kingdom 6 . 


107 

116 

123 

Per cent increase over 1905 



8.1, 

15.0 

France . 

144 

173 

177 


Per cent increase over 1900 


20.1 

22.9 


Prussia-Hesse. 

®163 

®159 

210 

233 

Per cent increase over 1900 


*2.5 

28.8 

J&.9 

United States, All groups® .. 

271 

322 

352 

363 

Per cent increase over 1900 


18.8 

29.9 

31,.0 


ar Mixed train miles included in divisor. 
b North Eastern Railway only. 


^Decrease 



















43 


TABULAR COMPARISON OF RAILWAY STATISTICS 

(continued) 



1900 

1905 

1908 

1909 

Average haul per ton (miles)— 





United States, Group II . 

110.9 

114.6 

130.6 

130.3 

Per cent increase over 1900 


3.3 

17.8 

17.5 

United Kingdom®. 


22.7 

23.2 

23.1 

Per cent increase over 1905 



2.2 

1.8 

France. 

81.1 

79.0 

81.0 .. 


Per cent increase over 1900 


*2.6 

*.l .. 


Prussia-Hesse. 

73.1 

69.6 

69.5 

69.0 

Per cent increase over 1900 


*4.8 

*4.9 

*5.6 

United States, All groups (as 





a system). 

242.7 

237.6 

253.9 

251.1 

Per cent increase over 1900 


*2.1 

4.6 

3.5 

United States (average rail- 





way) . 

130.9 

130.6 

143.8 

141.9 

Per cent increase over 1900 


* .2 

9.9 

8.4 

a North Eastern Railway only. 





Receipts per ton per mile 





(cents) — 





United States, Group II . 

.61 

.66 

.64 

.65 

Per cent increase over 1900 


8.2 

4.9 

6.6 

United Kingdom® . 


2.36 

2.31 

2.30 

Per cent increase over 1905 



*2.1 

*2.5 

France. 

1.32 

1.27 

1.21 ., 


Per cent increase over 1900 


*3.8 

*8.3 ., 


Prussia-Hesse 6 . 

1.24 

1.25 

1.24 

1.24 

Per cent increase over 1900 


.8 

0.0 

0.0 

United States, All groups... 

.73 

.77 

.75 

.76 

Per cent increase over 1900 


5.5 

2.7 

4.1 

a North Eastern Railway only. 





b Excluding receipts from miscellaneous sources (Nebenertrage), for which 

ton-mileage figures are not given. 





Ton miles per inhabitant— 





United States, Group II. 

2,554 

2,826 

3,125 

2,950 

Per cent increase over 1900 


10.7 

22.4 

15.5 

TTnifprl TTi n orn nm 










Per cent increase over 1900 





France. 

292 

309 

359 .. 


Per cent increase over 1900 


5.8 

22.9 .. 


Prussia-Hesse. 

486 

555 

579 

606 

Per cent increase over 1900 


11,..2 

19.1 

24.7 

United States, All groups... 

1,863 

2,220 

2,460 

2,421 

Per cent increase over 1900 


19.2 

32.0 

30.0 


^Decrease. 
























44 


TABULAR COMPARISON OF RAILWAY STATISTICS 

(continued) 



1900 

1905 

1908 

1909 

Passenger miles per mile of 
line— 

United States, Group II. 

202,902 

255,718 

304,163 

290,023 

Per cent increase over 1900 


26.0 

4.9.9 

42.9 

United Kingdom. 





Per cent increase over 1900 





France. 

369,021 

357,574 

398,984 


Per cent increase over 1900 


*3.1 

8.1 


Prussia-Hesse. 

Per cent increase over 1908 



627,032 

675,023 

7.7 

United States, All groups ... 

83,290 

109,949 

130,073 

127,299 

Per cent increase over 1900 


32.0 

56.2 

52.8 

Average passengers per train— 

United States, Group II® ... 

47 

55 

62 

60 

Per cent increase over 1900 


17.0 

31.9 

27.7 

United Kingdom . 





Per cent increase over 1900 





France. 

64 

62 

65 


Per cent increase over 1900 


*3.1 

1.6 


Prussia-Hesse. 

®80 

®78 

79 

85 

Per cent increase over 1900 


*2.5 

*1.2 

6.3 

United States, All groups®.. 

41 

48 

54 

54 

Per cent increase over 1900 
a Mixed train miles included in divisor. 

17.1 

31.7 

31.7 

Average journey per passenger 
(miles)— 

United States, Group II. 

20.7 

21.6 

23.0 

22.8 

Per cent increase over 1900 


1,.3 

11.1 

10.1 

United Kingdom,. 





Per cent increase over 1900 





France. 

19.3 

19.8 

20.8 


Per cent increase over 1900 


2.6 

7.8 


Prussia-Hesse. 

15.0 

14.6 

14.3 

14.4 

Per cent increase over 1900 


*2.7 

*4.7 

*4.0 

United States, All groups... 

27.8 

32.2 

32.9 

32.8 

Per cent increase over 1900 


15.8 

18.3 

18.0 


♦Decrease. 























45 


TABULAR COMPARISON OF RAILWAY STATISTICS 


(continued) 


Receipts per passenger per mile 
(cents) — 

1900 

1905 

1908 

1909 

United States, Group II. 

1.79 

1.72 

1.69 

1.70 

Per cent increase over 1900 


* 3.9 

*5.6 

*5.0 

United Kingdom . 





Per cent increase over 1900 





F ranee. 

1.16 

1.15 

i.n .. 


Per cent increase over 1900 


*. 9 

*4.3 .. 


Prussia-Hesse. 

1.01 

.95 

.90 

.94 

Per cent increase over 1900 


* 5.9 

*10.9 

* 6.9 

United States, All groups... 

2.00 

1.96 

1.94 

1.93 

Per cent increase over 1900 


*2.0 

*3.0 

*3.5 

Passenger miles per inhabitant— 

United States, Group II . 

272.7 

328.5 

368.1 

347.5 

Per cent increase over 1900 


20.5 

35.0 

27.i 

United Kingdom . 





Per cent increase over 1900 





France . 

224.6 

224.3 

253.7 .. 


Per cent increase over 1900 


* .1 

13.0 .. 


Prussia-Hesse . 

244.8 

299.5 

339.5 

366.7 

Per cent increase over 1900 


22.3 

38.7 

i9 . 8 

United States, All groups... 

211.0 

283.4 

327.6 

322.1 

Per cent increase over 1900 


Si.3 

55.3 

52.7 

Average trips per inhabitant— 

United States, Group II . 

18.2 

15.2 

16.2 

15.5 

Per cent increase over 1900 


15.2 

22.7 

17. i 

United Kingdom" «. 

27.8 

27.7 

28.7 

28.1 

Per cent increase over 1900 



3.2 

1.1 

France. 

11.7 

11.3 

12.2 .. 


Per cent increase over 1900 


*3.i 

i.3 .. 


Prussia-Hesse. 

16.3 

20.4 

23.7 

25.4 

Per cent increase over 1900 


25.2 

i5.i 

55.8 

United States, All groups... 

7.6 

8.8 

10.0 

9.9 

Per cent increase over 1900 


15.8 

31.6 

30.3 


a Excludes trips on season and periodical tickets. 


^Decrease. 























46 


TABULAR COMPARISON OF RAILWAY STATISTICS 

(continued) 



1900 

1905 

1908 

1909 

Capitalization per mile of line— 

United States, Group II. 

Per cent increase over 1900 





United Kingdom.$261,863 $271,069 $274,842 

Per cent increase over 1900 3.5 5.0 

$274,766 

■M 

France". 

Per cent increase over 1900 

133,583 

138,053 

3.1, 

141,301 

5.8 


Prussia-Hesse. 

Per cent increase over 1900 

98,050 

100,062 

2.1 

108,293 

10.1, 

110,727 

12.9 

United States, All groups 6 . 
Per cent increase over 1908 
a “Cost of construction.” 

b Net capitalization. 

57,201 

59,259 

3.6 

Total revenue per revenue 
train mile— 

United States, Group II. 

Per cent increase over 1908 



$2.24 

$2.26 

.9 

United Kingdom. 

Per cent increase over 1900 

$1.20 

$1.28 

6.7 

1.27 

5.8 

1.28 

6.7 

France. 

Per cent increase over 1900 

1.35 

1.43 

5.9 

1.43 

5.9 


Prussia-Hesse. 

Per cent increase over 1900 

1.60 

1.52 

*5.0 

1.50 

*6.2 

1.61 

.6 

United States, All groups ... 
Per cent increase over 1900 

1.66 

1.98 

19.3 

2.11 

27.1 

2.17 

30.7 


Ratio of passenger to total 


• 



revenues (per cent)— 





United States, Group II. 

22.0 

21.7 

22.4 

22.2 

United Kingdom . 

38.5 

38.3 

38.5 

37.9 

France". 

34.3 

33.0 

32.9 


Prussia-Hesse. 

27.6 

27.5 

28.2 

28.6 

United States, All groups... 

21.8 

22.7 

23.7 

23.3 


a “Grande Vitesse” train revenues, which correspond roughly to passenger 
service train revenue in the United States. 


^Decrease. 






















47 


TABULAR COMPARISON OF RAILWAY STATISTICS 

(continued) 



1900 

1905 

1908 

1909 

Operating revenues per mile 

of line« — 




• 

United States, Group II. 

Per cent increase over 1900 

$16,514 

$20,752 

25.7 

$22,915 

38.8 

$22,021 

33.3 

United Kingdom . 

Per cent increase over 1900 

22,011 

22,391 

1.7 

23,184 

5.3 

23,135 

5.1 

France. 

Per cent increase over 1900 

12,363 

12,364 

b 

13,406 

8.If 


Prussia-Hesse. 

Per cent increase over 1900 

17,440 

19,171 

9.9 

20,221 

15.9 

21,056 

20.7 

United States, All groups ... 
Per cent increase over 1900 

7,722 

9,598 

2 If. 3 

10,491 

35.9 

10,356 

34.1 

a Figures are not strictly comparable as 
owing to variations in accounting methods. 
b Less than one-tenth of one per cent. 

between the 

different 

countries, 

Operating expenses per mile of 
line« — 

United States, Group II . 

Per cent increase over 1900 

$10,635 

$13,671 

28.5 

$15,972 

50.2 

$14,674 

38.0 

United Kingdom . 

Per cent increase over 1900 

13,743 

14,157 

3.0 

15,159 

10.3 

14,833 

7.9 

France . 

Per cent increase over 1900 

6,717 

6,455 

*3.9 

7,765 

15.6 


Prussia-Hesse . 

Per cent increase over 1900 

10,373 

11,622 

12.0 

14,621 

Ifl.O 

14,527 

40.1 

United States, All groups... 
Per cent increase over 1900 

4,993 

6,409 

28. If 

7,320 

4.6.6 

6,851 

37.2 

a Figures are not strictly comparable as 
owing to variations in accounting methods. 

between the 

different 

countries, 

Net operating revenue per 
mile of line* — 

United States, Group II. 

Per cent increase over 1900 

$5,879 

$7,081 

20 .If 

$6,943 

18.1 

$7,347 

25.0 

United Kingdom . 

Per cent increase over 1900 

8,268 

8,234 

*•4 

8,025 
* 2.9 

8,302 
• 4 

France . 

Per cent increase over 1900 

5,646 

5,909 

4-7 

5,641 

*.l 


Prussia-Hesse. 

Per cent increase over 1900 

7,067 

7,549 

6.8 

5,600 
* 20.8 

6,529 

*7.d 

United States, All groups ... 
Per cent increase over 1900 

2,729 

3,189 

16.9 

3,171 

16.2 

3,505 

28.4 

a Figures are not strictly comparable as 
owing to variations in accounting methods. 

between the 

: different 

countries, 


^Decrease. 




















Lb Je 12 


BULLETINS OF THE 
BUREAU OF RAILWAY ECONOMICS 


( Continued .) 

14. Summary of Revenues and Expenses of Steam Roads in the 

United States for April, 1911. 

15. The Conflict Between Federal and State Regulation of the 

Railways. 

16. Summary of Revenues and Expenses of Steam Roads in the 

United States for May, 1911. 

17. Railway Wage Increases for the year ending June 30, 1911. 
Retrenchment in the Railway Labor Force in 1911. 

18. Capitalization and Dividends of the Railways of Texas, Year 

Ending June 30, 1909. 

19. Summary of Revenues and Expenses of Steam Roads in the 

United States for June, 1911. 

20. Summary of Revenues and Expenses of Steam Roads in the 

United States for July, 1911. 

21. The Cost of Transportation on the Erie Canal and by Rail. 

22. Summary of Revenues and Expenses of Steam Roads in the 

United States for August, 1911. 

23. Analysis of the Accident Statistics of the Interstate Commerce 

Commission for the Year Ending June 30, 1911. 

24. Comparative Railway Statistics of the United States, the United 

Kingdom, France, and Germany. 





































































' 
















































































































































































